RSI Divergence Indicator + STOCH

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The RSI Divergence Indicator + STOCH is a combined technical analysis tool that helps traders identify potential reversal points in the market by analyzing two key momentum indicators: the Relative Strength Index (RSI) and the Stochastic Oscillator (STOCH).

RSI Divergence: The RSI measures the speed and change of price movements, ranging from 0 to 100. Divergence occurs when the price of an asset moves in the opposite direction of the RSI, signaling a potential shift in market direction. For example, if the price makes a higher high, but the RSI forms a lower high, this indicates a bearish divergence and suggests that upward momentum may be weakening.

Stochastic Oscillator (STOCH): The Stochastic Oscillator compares an asset's closing price to its price range over a specified period. It provides signals of overbought or oversold conditions, typically using a scale of 0 to 100. When the Stochastic line crosses above 80, it signals overbought conditions, and below 20 signals oversold conditions.