Fortescue Metals Group Ltd forms bullish "Relative Strength...

Fortescue Metals Group Ltd forms bullish "Relative Strength Index" chart pattern
Sep 06, 2022

Trading Central has detected a "Relative Strength Index (RSI)" chart pattern formed on Fortescue Metals Group Ltd (FMG:ASX). This bullish signal indicates that the stock price may rise from the close of16.44.

Tells Me: For bullish events, we may be seeing higher prices as the price seems to be recovering from oversold as losses on down periods (over the last 14 bars) are no longer overwhelming gains on up periods to the same extent. The opposite is true for bearish events, which signal lower prices ahead as the price seems to be recovering from overbought because up days are no longer overwhelming down days to quite the same extent.

RSI measures the strength of an issue compared to its recent history of price change by comparing "up" periods to "down" periods. It's based on the premise that overbought conditions tend to occur after the market has advanced for a disproportionate number of periods. The RSI fluctuates between 0 and 100 with 70 and 30 often used to indicate overbought and oversold levels, and 50 the dividing line indicating the direction of the trend. The RSI should not be confused with relative strength which compares a financial instrument to a market index.

This bullish pattern can be seen on the following chart and was detected by Trading Central proprietary pattern recognition technology.