Up until now I used RSI to look at a stock and when it was below 30, it was a good time to buy, and above 70 it was overbought.
But I am now learning that under 50 means it's bearish, which doesn't quite make sense to me. When I look back on the graph, after the RSI dips to the point <50 it has a reversal and goes up.
I assumed that when the price of a stock is going up, and the RSI is going down, that was a bullish signal because it would be saying that the price is rising with a lot of people selling.
Can someone please explain where my logic is wrong.
Thanks
tl;dr explain the philosophy/psychology behind the RSI divergence
Submitted April 28, 2014 at 06:22PM by notevenfinalform http://ift.tt/QS99dS
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