Today we have already taken out the low of yesterday and have yet to challenge yesterday’s high. The closest key level to watch was 930 and we have already tagged that level and found support there this morning. We trade around 12,000 level at the time of writing but remain under pressure.
We can see on the 60 minute chart how price is beginning to consolidate in this 11,930 to 12,030 level. There was a nice bounce from 930, but the real test would be to see whether we can break the previous high of 12,053. For now, price action is trading sideways.
RSI divergence is an excellent technique to use in your trading. But like any other technique it is rarely effective use on its own. It is much more effective when used with resistance and support zones. In this example we have the 930 zone highlighted and you can see how there was regular bullish RSI divergence followed by a rally from that 930 support zone. Rabbie actually took out the entire value area from yesterday and we currently trade above the value area high. If we can hold above the VAH then I would like to see a test of yesterday‘s high.