Technical Analysis Part - 3

Volume can confirm divergence signals by indicating the strength and conviction behind price movements. High volume during divergence signals strengthens the reliability of the signal, while low volume may indicate weaker market sentiment.

The basic rule of thumb is that an RSI value over 70 indicates a stock is “overbought” and may see its price fall in the future. Meanwhile, an RSI value of 30 or lower can mean that the price could go up. An RSI of 50 is often seen as neutral, meaning the stock has not been either overbought or oversold.