area gap, breskout gap, runaway gap, exhaustion gap. the average of previous close are referred together to draw a line above which its time to buy & below that its time to sell.
It holds good in trending zone. Relative strength index has two zones. It holds good in non-trending zones
1. over bought (Price>70)
2. over sold (Price<70)
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Hi sir,
This will be the appropriate answer for the question What is RSI? How to identify the buying zone?:
RSI (Relative Strength Index) – Technical Indicators
RSI works well in non trending time and indicates the overbought & oversold region.
When the RSI is applied on the non trending zone, it provides the index with the mark of 70 and 30 scale
If the RSI scale goes above 70 mark i.e. RSI > 70 it indicates the strength and if RSI scale comes back to 70 mark it indicates the overbought , temporary weakness is expected i.e. short position can be created.
If the RSI scale goes below 30 mark i.e. RSI <30 it indicates the weakness an if RSI comes back to 30 mark it indicates the oversold , temporary strength is expected i.e. long position can be created.