Tuesday, June 09, 2015 12:31:48 AM
*** Failure Swings
Wilder also considered failure swings as strong indications of an impending reversal.
Failure swings are independent of price action. In other words, failure swings focus solely on RSI for signals and ignore the concept of divergences
***A bearish failure swing forms when RSI moves above 70, pulls back, bounces, fails to exceed 70 and then breaks its prior low.
It is basically a move to overbought levels and then a lower high below overbought levels.
Chart 8 shows Texas Instruments (TXN) with a bearish failure swing in May-June 2008.
SEE CHART SCHOOL
http://stockcharts.com/school/doku.php?st=rsi&id=chart_school:technical_indicators:relative_strength_index_rsi
Wilder also considered failure swings as strong indications of an impending reversal.
Failure swings are independent of price action. In other words, failure swings focus solely on RSI for signals and ignore the concept of divergences
***A bearish failure swing forms when RSI moves above 70, pulls back, bounces, fails to exceed 70 and then breaks its prior low.
It is basically a move to overbought levels and then a lower high below overbought levels.
Chart 8 shows Texas Instruments (TXN) with a bearish failure swing in May-June 2008.
SEE CHART SCHOOL
http://stockcharts.com/school/doku.php?st=rsi&id=chart_school:technical_indicators:relative_strength_index_rsi
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