Manitowoc: A Positive RSI Reversal

Published 01/29/2014, 12:16 AM
Updated 05/14/2017, 06:45 AM

One trading signal that does not get a lot of screen time is something called a Positive RSI Reversal. Classically trained technicians may recognize it as similar to the techniques of measuring Relative Strength Index (RSI) related moves, but not call it this. The Positive RSI Reversal signal occurs when the RSI makes a new low and reverses back higher, while the stock price does not make a new low. The closer the lows in the RSI/Price occur in time the more strength the signal is said to have. There is also a Negative RSI Reversal, which works the opposite way, triggering when new highs in the RSI are paired with a lower high in the price.

Currently there is a Positive RSI Reversal taking place in a position I own, Manitowoc, (MTW). Notice on the chart below that the lower low in the RSI was met with a higher low in price. The target for the reversal is a move equal to the previous move higher. In this case up to 26.45. This is a very simple signal. Start looking for it.

Manitowoc

Disclosure: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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