RSI Swing Failure Stock Indices Setup

RSI stock indices swing failure can be a very accurate method for trading short term stock indices moves. It can also be used for trading long term stock indices trends but it is best suited for short term stock indices especially for those stock indices traders that trade reversals.

The RSI swing failure swing stock indices setup is a confirmation of a pending stock indices market reversal. This stock indices swing failure setups a leading breakout signal, it warns that a support or resistance level in the stock indices market is going to be penetrated. This stock indices setup should occur at values above 70 for an upward stock indices trend and values below 30 in a downward stock index trend.

Swing Failure In an Upward Stock Indices Trend

If the stock indices RSI Stock Indices Indicator hits 79 then pulls back to 72, then rises to 76 and finally drops to below 72 this is considered a failure swing stock indices RSI setup. Since the 72 level is an RSI support level and it has been penetrated it means that stock index price will and follow and it will penetrate its support level.

In the stock indices example illustrated below, the stock indices RSI indicator hits 73 then pulls back to 56, this is a support level. The stock indices indicator then rises to 68 and then drops to below 56, thus breaking the support level. The stock index price then follows afterwards breaking it support level. The stock indices RSI swing failure is a leading stock indices signal and it is confirmed when stock index price also breaks it support level. Some stock indices traders open trades once the swing failure is complete while other stock indices traders wait for stock index price confirmation, either way it is for a stock indices trader to decide what work best for them.

Stock Indices Trading RSI Swing Failure Setup in an Upward Stock Indices Trend

Swing Failure In a Downward Stock Indices Trend

If the stock indices RSI Stock Indices Indicator hits 20 then pulls back to 28, then falls to 24 and finally penetrates above 28, this is considered a failure swing setup. Since the 28 level is an RSI resistance level and it has been penetrated it means that stock index price will and follow and it will penetrate its resistance level.

Stock Indices Trading RSI Swing Failure Setup in a Downward Stock Indices Trend