StockFetcher Forums · General Discussion · Using RSI(2) to determine overall market direction.<< >>Post Follow-up
jimichelssf
12 posts
msg #47380
Ignore jimichelssf
10/8/2006 7:11:22 PM

I'm new to Stock Fetcher and I had a couple of questions that need a lot more experience than I have to answer.

Through this forum I've been introduced to RSI(2) and I'm starting to see how it can be used ( together with other info) to get in and out of a trade. In my preferred trading style, I like to get in and out of a trade in a matter of days not weeks or months.

I've recently started to overlay the RSI(2) for the SPY (S&P500) on top of the RSI(2) plot for the stock I'm looking at as a comparison. It appears that there is a good match most of the time for over bought and overs sold conditions on many stocks relative to SPY. It looks much safer to enter the trade long when both RSI(2)'s are surging from low to high.

However, some stocks appear to go against the flow. For Example... MRVL over the last 2 days has bounced off of an over sold condition while SPY appears to be falling off of an over bought condition (Using RSI(2) as the metric). Working in favor of MRVL .... accumulation/distribution and CCI are both showing new strength.

My question is: Should I only trade with the overall market direction...using SPY (or QQQQ or DIA or ...) as a representative view of how the overall market is feeling. Or.... is there a time when it is appropriate to go against the flow if the particular stock shows enough strength?

Next question: If its advisable to go against the flow it the stock has enough strength.... how much is enough strength?

Thanks!

James













StockFetcher Forums · General Discussion · Using RSI(2) to determine overall market direction.<< >>Post Follow-up

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