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Essential RSI insights

MAXIMIZE Your Entry Points with This RSI Signal!

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    Summary

    In this video, Joe Rabel from Rabel Stock Research delves into an insightful lesson on using the RSI indicator to maximize entry points in the stock market. He discusses an RSI setup that occurs infrequently but offers significant advantages when spotted. Joe explores the concept of using a short-term RSI in an uptrend to identify oversold conditions as buying opportunities. He emphasizes combining weekly and daily RSI charts, focusing on periods when RSI levels indicate deep oversold positions in strong uptrends. Additionally, Joe reviews several stock sectors, their momentum, and shares examples of potential entry points, using real market scenarios. He concludes by offering resources for those interested in learning and trading with his methods.

      Highlights

      • Joe Rabel introduces a unique RSI lesson for traders 📘.
      • Insight into short-term RSI usage in uptrends for oversold conditions 🔍.
      • RSI 5 crossing below 50 in an uptrend can signal a buy opportunity 🚀.
      • Joe discusses sector analysis, highlighting the basic materials sector 🏗️.
      • RSI strategy involves combining various time frames for better accuracy 📏.
      • Joe emphasizes the need for discipline and patience in trading 🕰️.

      Key Takeaways

      • Learn how to leverage RSI signals for better trade entries 📈.
      • Understand the importance of different time frames in stock analysis ⏱️.
      • RSI 5 and RSI 20 can be powerful tools when used together 🔧.
      • Recognize stock pulling back like a rubber band for potential gains 🏹.
      • Advanced insights into sector analysis and momentum tracking 📊.
      • Adopt a disciplined approach to trading with Joe's strategies 🎯.

      Overview

      The video begins with Joe Rabel introducing a powerful yet underutilized RSI setup ideal for maximizing stock entry points. By focusing on short-term RSI dips in an otherwise strong uptrend, Joe explains how traders can identify excellent buying opportunities. He draws upon market indicators and historical examples to illustrate how these strategies can work in real trading scenarios.

        Joe expands on his RSI methods by combining both weekly and daily timeframes to provide a comprehensive view of market conditions. He shares insights from Larry Connor's work, adapting them to his techniques, and offers practical examples. Joe further explains the concept of RSI 5 crossing below 50 to signal deep oversold conditions providing a chance for entering an ongoing uptrend.

          The latter part of the video showcases Joe's sector analysis, where he reviews various stock sectors, their momentum trends, and the potential for gains. He shares his expertise in sector rotation, showing the impact of market dynamics on different industries. Concluding with educational resources, Joe reaffirms the importance of thorough research, disciplined trading, and continuous learning.

            MAXIMIZE Your Entry Points with This RSI Signal! Transcription

            • 00:00 - 00:30 [Music] hi this is Joe Rabel with Rabel stock research so we're going to start the show talking about a lesson on RSI I think this can be really helpful um it isolates a particular setup that does not happen all that often but when it does you want to really understand it and be able to take advantage all right so we're going to go through that um
            • 00:30 - 01:00 then I'm going to give you a slightly different way of how I look at the sector review something that I sent out in my weekly report um just to give you an idea of kind of where we're situated in the different sectors uh and then we'll go through some indices and also talk about the stocks that uh were requested this week okay so I've got two weekly charts up uh on the spy on the right I've got the RSI 5 and on the left I've got the RSI 20 let's focus in on the right one because I wanted to talk a little about Larry Connor's and some of
            • 01:00 - 01:30 the work that I studied from him uh which basically what he was doing was he was looking for stocks that were in an uptrend and he defined uptrend by anything that was above the 200 day I believe I mean it's been a while since I've uh looked at that work but I he's looking at price and some form of moving average to kind of Define if you're above a rising 200 day then that that means that that time frame is in an uptrend and then what he would look for
            • 01:30 - 02:00 is a short-term RSI I believe he was using like an RSI 3 all right and he would be looking for periods where it would get oversold in an uptrend and he would try and take advantage of that and look for a pop to the upside now he was doing this on a daily chart so I'm looking at weeklys but it will it's still the same point um it's the reason why I started looking at this are I started looking at the different time frames I thought the two or the three which is what he was using I thought it
            • 02:00 - 02:30 was a little too quick and offer too many signals and then I was looking at it a four and then I switched it to a five and it really felt like this was the right one because what we're trying to identify are periods where we're in an uptrend but we get this move down and really what we're looking for is a move below the 50 line if we can get a move below the 50 line uh while we're in an uptrend then uh you know we've got a pretty good opportunity to buy a stock that's that's bullish in an oversold
            • 02:30 - 03:00 condition all right so at least that's the that's the concept behind it and I just wanted to point out was from Larry Connor where I learned that now one of the things that um I want to point out is that I don't really use the moving averages for this when I'm looking at RSI I I look at the 20 RSI so the 20 RSI being above the 50 line is a pretty good Trend indicator it's as long as that's above and stays above through pullbacks then we know we in a pretty strong uh
            • 03:00 - 03:30 environment it gives you a element of momentum on top of the uh Trend indication okay so if you're above the 50 Mark through pullbacks in other words if the RSI 20 a slower moving RSI can stay above uh the 50 line then you're in a pretty strong Trend all right and you can you can go and look for oversold conditions on uh on the RSI 5 to offer you um setup now I don't necessarily do
            • 03:30 - 04:00 it that way a lot of times what I'll do when this gets oversold like this is go down to the smaller time frame and look for an entry all right but um for the cases of today I just uh for the purposes of today I just want to explain uh why I'm looking at the RSI 20 and then the RSI 5 now I don't display it this way I actually look at it this way now I've got a weekly chart on the left and a daily chart on the right and you can see I've saved myself a lot of space because I've overlaid the 20 and the five together
            • 04:00 - 04:30 all right very easy to do on this ACP program now what we're looking for are periods where and here's our 50 line we're looking for periods where the the Gray Line the five is coming down below the 50 level all right um and the RSI 20 the red line is staying above all right that's that's a simple uh there there are some caveats to that but I'm just going to keep it really simple because I want to explain something even more important to me when we're in a really strong Trend these moving averages are
            • 04:30 - 05:00 moving up I want both moving averages rising in this situation all right and RSI 20 stays above 50 through a pullback but also we get a move down to the 30 Mark or lower this actually touch the 30 Mark I like it when it just drops down just below but 30 is close enough um you know if we get to that 30 level we are deeply oversold and we're in uptrend so this is more of that Larry Connor's mentality I'm looking at an up Trend
            • 05:00 - 05:30 strong uptrend because both moving averages are rising we get a strong dip that causes an oversold reading we want to look to take advantage of that all right now I'll give you an example um let me see if uh let me move this it doesn't happen all that often just so you're aware we don't get these signals all the time so you want to be ready for them when they show up here's a great example on the daily chart let me reset the scale um so we're moving up in 23
            • 05:30 - 06:00 off the the bare Market low right we get this Dynamic move to the upside we get some strength and we get a pretty sharp pullback over the daily chart it just you know pulls back for four or five straight days look at how oversold this gets down in the 20s on the RSI 5 and this is way way above the 50 Mark when we see this and this line is still Rising the 40 will almost always be rising but if both lines are still Rising we can take advantage of this by
            • 06:00 - 06:30 looking for any kind of a reversal off the low we can be a lot more aggressive on this kind of Entry um because we know that we're in a strong uptrend and we know we're deeply deeply oversold all right so we want to try and take advantage of that when it takes place if you look at um in fact uh I'm going to give you another example I'm going to go and switch this to the uh hourly chart um now uh if you notice we got a pullback here and most of the time this
            • 06:30 - 07:00 pullback is going to come closer to the 50 Mark now if you notice this line is starting to lose some slope but it hasn't rolled down as long as we don't have a negative slope to the 18 you can consider it all right now preferably once this starts to roll over it doesn't mean you can't take a trade like this all right but preferably we want the situation where the lines are rising all right both lines are steadily Rising when you have that you have a very good
            • 07:00 - 07:30 opportunity go look at Nidia nvda back in 2020 when we had the bare Market in the um covid period all right um that was on the weekly chart it came down both lines were Rising it got oversold and it snapped back and went straight up um this is s this is an indic this is a IND indication that I've been looking for for a very very long time and using it uh it's it's very powerful when it comes up not a lot of times it'll happen
            • 07:30 - 08:00 when the market is pulling back after a strong move and some of the strongest stocks will pull back with it but it's like a rubber band being pulled down and and and then all you do is let go and it snaps right back so that's kind of what we're on the lookout for is that built up tension from a pullback into a strong uptrend if you're enjoying the content hit that like button and also subscribe uh so my services can be found at Rabel stock research.com I'm on this page
            • 08:00 - 08:30 right now you can see at the top I've got my Advanced Trend and momentum courses there's three different courses now I've individually pric them or you can buy them as a bundle and they are lifetime access now so I changed that um it's not year toe okay and then we have the individual package I have about two to three reports each week plus a special video weekly video for uh that package uh that covers a lot of details into what I'm seeing for the week uh so if you have an interest go ahead and
            • 08:30 - 09:00 take a look uh also the book is on the on the book tab you can go if this is a good place to start if you're uh new to my methodology before we get going my comments are for educational purposes only please do your own due diligence before uh making any Investments all right so I want to show you uh the report on Monday I sent out at least this is part of the report I get a lot of questions about these reports so I Just sh to give a uh really quick and brief uh outline of something that um I think it's pretty useful so these are
            • 09:00 - 09:30 the different sectors there are about in this review there were about four a little over 400 stocks uh broken down by sector that I go through one by one all right and what we've got here and I'll just use this uh basic materials as an example so um currently I'm showing short-term positives for the um the basic materials up at 90% that means um I've tabulated each and every one of the individual stocks that are in the review
            • 09:30 - 10:00 that are that are in the basic material sector and I'm showing whether they have positive momentum on their weekly chart and that's what I consider to be short-term positive it doesn't mean it's in an uptrend or a downtrend it just means that it's got positive momentum in place and that really increases the likelihood that we could get an upside Rally from those stocks all right so it has positive it's basically a short-term positive that's why I categorize it that way so we're up to 90% when we're looking at that on the basic materials now the long-term positives are
            • 10:00 - 10:30 essentially all the stocks inside the basic materials that are in uptrends that are confirmed uptrends on their weekly chart so when we look at it that way all right we've got um a pretty good way of of sort of breaking down what's actually taking place and you can see the periods where the short-term positives get oversold what I really like is when we get oversold but we're still above the long-term positiv is still around the 50 Mark when we get
            • 10:30 - 11:00 those they tend to be tend to be very good opportunities we saw one of those recently um on the most recent uh decline in the basic materials um one of the things I did want to point out the only sector that is not above the 50% Mark right now on its on its um uh long-term positive chart right now is the energy and it's like 41 every other one of these sectors is showing more stocks that are in uptrends that are in downtrends or even neutral all right um
            • 11:00 - 11:30 so anyway I just thought this was worthwhile to be able to see these um we do have a few getting overbought on the short-term positive so I like to monitor those we got the basic materials overbought we've got consumer discretionary overbought Industrials are getting close short-term positives for financials are getting overbought and if you notice almost every single Financial that I do in the large cap universe is currently in a uptrend all right it's pretty significant um I think actually pretty important uh we just had U
            • 11:30 - 12:00 technolog is trying to turn up all right it hasn't really clicked in in from a shortterm standpoint but it is showing some signs of improvement now the REITs and the utilities both were overbought and starting to turn down from an overbought condition all right anyway I thought this was be a good way to look at the sectors a little differently this week um let's go ahead and move on okay we're going to switch over to my five chart setup and I'm going to go through a couple of indices and then all the
            • 12:00 - 12:30 symol there were a lot of symol requests this week I'm going to try and get through all of them anything I don't get through I'll do the following um okay so QQQ so one of the things I'm really focusing on right now because we're not seeing much change on the monthly chart or the weekly other than the fact that we're we're still struggling a bit on the weekly to get through this uh key level on the QQQ at 500 that's a big round number we had a reversal there and uh looks like we're still having some issues and we're not showing a lot of strength in terms of new momentum on the
            • 12:30 - 13:00 weekly chart all right if we go to the Daily this is where it starts to bother me because a weekly chart can take some time to kick in the momentum the momentum is going to have some lag to it but we've on a daily chart we've made a pretty substantial move to the upside and yeah the macd has moved up a little bit um although it does look like it's really tiring out on this as well but look at how green Di has it it tried to make a few moves above 25 but it's just bar and now it's already dropping back
            • 13:00 - 13:30 down below the 25 line and notice how adx was never get the green based on the buyers the adx was never able to get above 25 through this whole move to the upside now we're into this a little bit more important resistance Zone and I'm sort of looking at I'm I'm waiting for one of two things to happen either big red bar and seller show up because we have not seen sellers now here's the peak in the well actually here's the peak in the sellers next peak in the sellers um next peak in the sellers next
            • 13:30 - 14:00 peak in the sellers you see how we've made lower highs in the sellers we need a breakout in the sellers to to really take out above these prior couple Peaks here and that to me would happen on a big green bar a big red bar if we got a big red bar that would tell me that this is probably going to work its way back down lower into a bigger support zone of 475 480 something like that now if we get the opposite if we can get a big green bar breaking out through 500 then I think we're on to something and we're going to see a lot of these stocks that
            • 14:00 - 14:30 have been kind of consolidating and correcting maybe really kick in and get another move to the upside I actually think the healthy thing would be is if this came down and consolidate a little bit more spent a little bit more time building a little bit bigger base so that's that's kind of what I'm thinking all right let's look at this iwm um now what I want to point out is how actually I should have left this chart up look at how disappointing this is the stock comes up it looks like it's trying to break out above this prior High it looks like green di is trying to
            • 14:30 - 15:00 get things going and then look at this monster Red Bar of re-entering the breakout area on the daily chart right and now green and red are kind of touching each other again adx is dropping because those two lines are together so we don't have the kind of confirmation that I'm looking for in a momentum basis we need some strength in the momentum if the if we get strength in the momentum especially with this green di breaking out then I think we're going to start to see the relative strength improve and I think the overall envir environment really starts to
            • 15:00 - 15:30 improve along with it all right let's start going through some requests so um I know I'm a little late on this uh this was from last week um I don't think this was a bad entry what you were uh bringing up we had the uh little higher low here uh we had we've had we've got really good group action both um and and the metals and both gold and silver um so I don't have a problem with how you've handled this I think you just have to recogn I that you're dealing with a very volatile stock that is in a
            • 15:30 - 16:00 volatile um area of the market that's going to have these kind of movements all right so I'm a big believer in setting your PL plan in place and following your plan that's kind of what I teach the subscribers to say stick with your plan don't micromanage this position because I think you can shake yourself right out of it uh but I don't have a huge problem with how you went about the taking this trade all right um Boeing so um yeah yeah I'm I'm not a huge fan of this I I see that you know
            • 16:00 - 16:30 it's coming down into this area where it's found support in the past but I don't see there's one there's one thing that does have me feeling somewhat interested in this all right and it's using the adx for what it's not really meant to be used for so we get the drop here and we get confirmation in the strength to the downside here all right and then we get a rally and then we make another move to the downside and if you notice the adx really has just barely cross the 25 level that's a sign of me
            • 16:30 - 17:00 that uh to me that the weak that that the stren that decline phase is losing strength and we should be on the lookout for a reversal now with that said we've got declining moving averages right MCD is still you know yeah it's trying to diverge off this low but I think those those lows are too far apart I think it's going to take a little bit of time to get things going here what I would be looking for is real strength on the daily chart maybe even push this up towards 170 and then maybe look for a pullback after that um okay Intel way
            • 17:00 - 17:30 too much damage done here this is what I call The Mending phase after massive damage all right this is the injured athlete that doesn't just twist an ankle or something like that but he's got like broke something's broken he needs to go through a full rehab period it takes a long time sometimes it's six to 12 months all right so take your time on this even if you're trading it I I mean we're we're running into a declining 18 a weak line I think it's an uphill battle um starting to see some signs of
            • 17:30 - 18:00 life in pelaton it it obviously has gone through a really rough period um it is a low adx pattern that's trying to emerge but here's my opinion here I would I would look for this to move up and then play the first pullback I don't think I'd play this right off this low it isn't really taking out the prior high on the weekly um even if I'm drawing these down I mean there's just really not it's not a really clean reversal yet so let it push up show some momentum and
            • 18:00 - 18:30 then play the first pullback okay look at the look at something a little bit different Zoom video this this is a little bit more intriguing I actually like the fact that this went to a new low look at that undercut and then immediately reversal with the big green bar now I I really think this is going to get through these Highs but we get a lot of confirmation on a move coming up through 75 don't have a problem if you wanted to play this especially if you get a little bit of a dip on the uh daily chart um all right I like this mu uh what we're
            • 18:30 - 19:00 looking for now we got the zero line reversal and we got a low adx condition we had a pullback which was a pinch play on the monthly good volume pattern looks like things are really charting to turn starting to turn around we need this to pull back and I think test this uh support area out and then form a higher low um but the momentum signs are really good I think this is turning the corner uh i n so uh we're pulling back
            • 19:00 - 19:30 to the 18month but the way we did it on the weekly I don't really like we've turned the 18 we down you see how this line is declining so I either one of two things needs to happen either we're going to fail here come back down test this and then come back up and form kind of like a double bottom and then form a a double breakout through the double top at 10 or we're going to bust through this and then we want to look for a pullback as this is cupping around that's what I would be looking for um as I'm going through this pattern and looking at this the volume was pretty
            • 19:30 - 20:00 heavy on the way down so I'm really not inclined to just take this as it's turning up off the daily chart or something like that it just doesn't do it for me it's going to need a little bit more confirmation um upstart Holdings showing signs of Life For the First Time Low adx condition through this period and then we get strength here now this happened the last time all right and look at how it pulled back this is why we did this is two-part there's two parts to this right we have the up move move and now we're looking for the down move there's
            • 20:00 - 20:30 actually three parts the we get the down move and it's it's on it's not like this it's more orderly if we get that then we're looking for the trigger to the upside that'll usually take place on the daily chart right now I think you got to watch for a pullback here it's up three four five weeks in a row we need a pullback and we need it to be orderly if that's the case then I'd really start to take a hard look at this one um sphere 3D um we are starting to perk up like the volume pattern here but
            • 20:30 - 21:00 right now this is really just a short-term trade we don't really have much going on on the weekly chart there's really not any uh real momentum yet now if you wanted to play this off the daily using the hourly for entry you could do that uh but you know it's it's it's really more of a trade maybe up towards one and a quarter one and a half something like that so you'd have to be pretty Nimble if you were going to do that tgb so um another Mining Company look at the strength here the pullback
            • 21:00 - 21:30 nice look to these the volume pattern is good we're finding support at the 18month now look at what we were talking about you see how we crossed below the declining 18 and now we're pulling back this is what I was talking about this is what we're looking for now if this can turn up take out a high of a prior like take out this week's High to the upside maybe in the form of an opposing Trend pattern on the daily chart then I would be uh pretty interested in this we're holding the zero line um and we've got low adx in place so really the overall
            • 21:30 - 22:00 pattern I think is pretty attractive we just need a little bit more confirmation with an entry pattern to the upside and I think that would come in the form of a higher bottom forming on the weekly chart thanks for joining me if you have any stock requests send them a stock talk at stockcharts.com or you can just put them in the comment area below also if you want to learn more about some of these techniques you can go to my YouTube channel called invest like a pro have a great week we'll see you next time