Latest news with #ExponentialMovingAverage
Economic Times
03-08-2025
- Business
- Economic Times
The RSI myth: Does this popular trading indicator actually work?
A 25-year backtest of RSI strategies across Indian indices reveals that long-only approaches yield promising results, particularly the RSI 30-70 reversal method for patient investors. Active traders may find faster RSI strategies beneficial for capital rotation. While not a magic formula, RSI proves useful when integrated into a broader, well-defined trading strategy. Tired of too many ads? Remove Ads Understanding RSI: What makes it so popular? A high RSI indicates strong recent gains, possibly signaling overbought conditions. indicates strong recent gains, possibly signaling overbought conditions. A low RSI suggests recent price declines, potentially highlighting oversold levels. RSI 30-70 reversal strategy: Buying when RSI recovers from oversold territory (crosses above 30) and selling when it dips from overbought levels (falls below 70). Buying when RSI recovers from oversold territory (crosses above 30) and selling when it dips from overbought levels (falls below 70). RSI 50 cross strategy: Buying when RSI rises above 50 (signaling upward momentum) and selling when it drops below 50. Buying when RSI rises above 50 (signaling upward momentum) and selling when it drops below 50. RSI EMA crossover strategy: Comparing RSI with its Exponential Moving Average (EMA) to identify smoother momentum shifts. Tired of too many ads? Remove Ads Putting RSI to the Test: What 25 years of data revealed Long-only RSI strategies worked. Short-selling and combined long-short strategies failed to generate consistent returns. The RSI 30-70 reversal method delivered the highest average returns per trade — but signaled very few trades. Ideal for long-term, patient investors. RSI EMA Cross and RSI 50 Cross strategies generated faster, more frequent trades with smaller gains per trade — better suited for active traders focused on capital rotation. Tweaking RSI settings significantly improved performance. Longer periods (like 21-day RSI) boosted returns in reversal strategies, while shorter periods (7-day RSI) worked better for faster strategies. Key Takeaway: RSI is useful, but not foolproof (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) For most investors and traders, technical analysis can often feel overwhelming filled with complicated charts, patterns, and unfamiliar terms. However, one indicator has managed to cut through this complexity with its simplicity and popularity: the Relative Strength Index ( RSI ).RSI is widely used to identify when a stock or index may be 'overbought' or 'oversold', helping traders spot potential turning points in the market. Over the years, it has become a go-to tool for both beginners and experienced market participants is a momentum indicator that measures the speed and strength of recent price movements. Plotted on a scale of 0 to 100, RSI values help traders understand whether a stock or index is potentially overbought (RSI above 70) or oversold (RSI below 30). RSI near 50 is typically considered practical terms:With this logic, many traders use RSI to time their entries and exits. Popular methods include:While these strategies are simple to implement, the real question remains: are they profitable?To separate myth from reality, conducted a 25-year backtest of these strategies across the Nifty 50, Nifty Next 50, Midcap 150, Smallcap 250, and Nifty 500 indices. The goal was clear: evaluate whether RSI-based strategies can generate consistent trading profits in Indian the world of trading, knowing when and how to use an indicator is just as important as knowing what it is. Tools like RSI are not shortcuts to success—they are decision-support mechanisms. When used thoughtfully and as part of a broader, well-defined strategy, they can help traders navigate the markets with greater discipline and structure. But relying on any single indicator in isolation is rarely a recipe for consistent 25-year backtest across India's major indices shows that RSI-based strategies can work, but not all of them perform equally. Long-only strategies delivered promising results for patient, long-term investors, while active traders may benefit from faster-moving RSI strategies focused on capital isn't a magic formula — but it's not irrelevant either.(The author, Nishchal Jain is Quant Researcher at )(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
03-08-2025
- Business
- Time of India
The RSI myth: Does this popular trading indicator actually work?
Understanding RSI: What makes it so popular? A high RSI indicates strong recent gains, possibly signaling overbought conditions. indicates strong recent gains, possibly signaling overbought conditions. A low RSI suggests recent price declines, potentially highlighting oversold levels. RSI 30-70 reversal strategy: Buying when RSI recovers from oversold territory (crosses above 30) and selling when it dips from overbought levels (falls below 70). Buying when RSI recovers from oversold territory (crosses above 30) and selling when it dips from overbought levels (falls below 70). RSI 50 cross strategy: Buying when RSI rises above 50 (signaling upward momentum) and selling when it drops below 50. Buying when RSI rises above 50 (signaling upward momentum) and selling when it drops below 50. RSI EMA crossover strategy: Comparing RSI with its Exponential Moving Average (EMA) to identify smoother momentum shifts. Live Events Putting RSI to the Test: What 25 years of data revealed Long-only RSI strategies worked. Short-selling and combined long-short strategies failed to generate consistent returns. The RSI 30-70 reversal method delivered the highest average returns per trade — but signaled very few trades. Ideal for long-term, patient investors. RSI EMA Cross and RSI 50 Cross strategies generated faster, more frequent trades with smaller gains per trade — better suited for active traders focused on capital rotation. Tweaking RSI settings significantly improved performance. Longer periods (like 21-day RSI) boosted returns in reversal strategies, while shorter periods (7-day RSI) worked better for faster strategies. Key Takeaway: RSI is useful, but not foolproof (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel For most investors and traders, technical analysis can often feel overwhelming filled with complicated charts, patterns, and unfamiliar terms. However, one indicator has managed to cut through this complexity with its simplicity and popularity: the Relative Strength Index ( RSI ).RSI is widely used to identify when a stock or index may be 'overbought' or 'oversold', helping traders spot potential turning points in the market. Over the years, it has become a go-to tool for both beginners and experienced market participants is a momentum indicator that measures the speed and strength of recent price movements. Plotted on a scale of 0 to 100, RSI values help traders understand whether a stock or index is potentially overbought (RSI above 70) or oversold (RSI below 30). RSI near 50 is typically considered practical terms:With this logic, many traders use RSI to time their entries and exits. Popular methods include:While these strategies are simple to implement, the real question remains: are they profitable?To separate myth from reality, conducted a 25-year backtest of these strategies across the Nifty 50, Nifty Next 50, Midcap 150, Smallcap 250, and Nifty 500 indices. The goal was clear: evaluate whether RSI-based strategies can generate consistent trading profits in Indian the world of trading, knowing when and how to use an indicator is just as important as knowing what it is. Tools like RSI are not shortcuts to success—they are decision-support mechanisms. When used thoughtfully and as part of a broader, well-defined strategy, they can help traders navigate the markets with greater discipline and structure. But relying on any single indicator in isolation is rarely a recipe for consistent 25-year backtest across India's major indices shows that RSI-based strategies can work, but not all of them perform equally. Long-only strategies delivered promising results for patient, long-term investors, while active traders may benefit from faster-moving RSI strategies focused on capital isn't a magic formula — but it's not irrelevant either.(The author, Nishchal Jain is Quant Researcher at )(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Mid East Info
30-07-2025
- Business
- Mid East Info
Silver Outlook: consolidation ahead of FOMC meeting as fundamental drivers remain
By Daniela Sabin Hathorn, senior market analyst at Silver XAG/USD has hovered near the $38.00 mark over recent sessions, pausing after a period of strong upward momentum. Friday's sharp selloff unwound part of the recent gains, keeping the price pinned below the 5-day Exponential Moving Average—a short-term resistance level. Despite this setback, the retreat appears to be a technical correction rather than a trend reversal, with the bias still skewed to the upside in the short-to-medium term. From a technical perspective, traders should closely monitor the $37.50 level. A sustained break below this threshold may signal further downside potential, while a close above $38.35 could reaffirm bullish momentum. Silver XAG/USD daily chart: Past performance is not a reliable indicator of future results. 1. Monetary Policy and Real Yields Silver, like other non-yielding assets, tends to benefit when interest rate expectations shift lower. With the Federal Reserve widely expected to keep rates on hold in the near term—and potentially lay the groundwork for future cuts—silver's appeal has strengthened. Declining real yields reduce the opportunity cost of holding precious metals, making silver an increasingly attractive store of value. 2. Geopolitical and Macro Backdrop Ongoing geopolitical uncertainties and shifting trade relationships have enhanced silver's reputation as a safe-haven asset. Yet silver stands apart from gold due to its dual nature—it's both a financial hedge and an essential industrial input. The metal plays a vital role in the production of solar panels, electric vehicles, and electronics, making it a beneficiary of both risk-off sentiment and renewed global growth optimism from trade disputes being resolved. 3. Structural Supply Deficit Beyond sentiment, fundamental supply-demand dynamics are also in silver's favour. Strong industrial demand, combined with tighter mine production, has created a structural supply shortfall. This supply imbalance continues to support prices even as some of the macroeconomic drivers wane. Despite the bullish setup, several headwinds could challenge silver's ascent: Hawkish Fed Risk: The most pressing threat lies in the potential for a hawkish pivot by the Federal Reserve. If policymakers further delay expected rate cuts or respond aggressively to renewed inflation pressures, the resulting spike in Treasury yields and the U.S. dollar could dampen silver's appeal. Global Industrial Slowdown: Silver's industrial side makes it highly sensitive to the health of global manufacturing. Any marked slowdown—particularly in China or other key industrial hubs—could weigh on demand expectations and cap price gains. As markets await Wednesday's FOMC meeting, volatility in precious metals may increase. While the Fed is not expected to change its policy stance, any signals on the path of future rate decisions will be closely scrutinized by silver and gold traders alike.
Economic Times
27-07-2025
- Business
- Economic Times
Fed meet, Q1 earnings and Trump tariffs among 10 factors to impact stock markets this week
Live Events 1. FOMC meeting 2. Tariff deadline ends 3. US markets 4. Q1 earnings 5. Corporate Action 6. IPO watch 7. FII / DII Action 8. Technical Factors 9. Rupee Vs Dollar 10. Crude Oil (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Indian benchmark indices ended the week lackluster, with Nifty finishing the week 0.5% lower. A host of important domestic and global events lined up during the week are likely to impact stock markets when they resume trading on Friday, Nifty declined 225.10 points or 0.9% to end the day at 24, on the day's action, Rupak De, Senior Technical Analyst at LKP Securities, said that the Nifty remained under sustained selling pressure as the index slipped below the crucial support level of 24,900. Moreover, it has closed below the 50-day Exponential Moving Average (50 EMA) for the first time in several sessions, signaling a meaningful weakening of the ongoing trend, he added.'If the Nifty fails to reclaim levels above 24,900 in the next session or two, bulls could face significant short-term challenges. On the downside, immediate support is seen at 24,700, followed by 24,500. On the upside, resistance is now placed around 25,000," De that are likely to impact movement when markets reopen this week:An all-important Federal Open Market Committee Meeting (FOMC) begins this week on Tuesday, July 29. Fed Chair Jerome Powell will give an insight of the Central Bank's view on the US economy, inflation and impact of tariffs. The outcome will be announced on July 30 and the interest rate is likely to remain markets will watch out for the developments on tariff as the August 1 pause deadline gets over this action on Wall Street will give cues to the global markets including India. Apart from the Fed rate setting panel's meeting and tariffs, top US companies like meta will announce their second quarter Friday, the US stock markets ended in the green. The Dow 30 ended the session at 44,901.90, gaining 208.01 points or 0.47% while S&P 500 settled at 6,388.64, up by 25.29 points or 0.40%. The Nasdaq Composite closed at 21,108.30, increasing by 50.36 points 0.24%.Adani Green Energy Ltd, Adani Total Gas, Bharat Electronics, CarTrade Tech, Mazagon Dock Shipbuilders, NTPC Green Energy, RailTel Corporation of India, , Hyundai Motor India, InterGlobe Aviation, Dabur India, One Mobikwik Systems, Swiggy, TVS Motor Company, Adani Power and Tata Power the Nifty companies will be Bharat Electronics (BEL), Indusind Bank, Larsen & Toubro, Tata Steel, NTPC, Coal India, Eicher Motors, Hindustan Unilever (HUL), Mahindra & Mahindra (M&M), Maruti Suzuki India, Titan Intech and Saturday, results of Kotak Mahindra Bank and IDFC Bank were also announced and stock of these companies will also be in of corporate action is lined-up this week with record dates for dividends, rights issue, stock split and bonus shares for more than 100 companies over the five-day trading companies that will have record dates for the purpose of dividend are DLF, KPIT Technologies, Wipro, Bosch, Eveready Industries India, Inox Wind, Punjab & Sind Bank, Coforge, Prataap Snacks, Bata India, City Union Bank, Eicher Motors, Marico, Maruti Suzuki India, REC and United Engineering has a record date for its stock split and 2:1 bonus issue. Indian Infotech & Software will have its record date on July 28 Jul for its rights issue of equity shares. Jonjua Overseas will also have its record date on the same day for its 1:20 bonus mainboard issues will open for subscription this week viz. Sri Lotus Developers and Realty IPO, National Securities Depository (NSDL) IPO, M&B Engineering (IPO), Aditya Infotech (IPO), and Laxmi India Finance (IPO).Also Read: Sri Lotus Developers IPO's latest GMP shows stock listing at 21% premium. Check details In the SME segment, 8 IPOs will hit the D-Street this week viz. Repono, Kaytex Fabrics, (Pune), Mehul Colours, Takyon Networks, Cash Ur Drive Marketing, Renol Polychem and Flysbs issues of Shanti Gold International Limited, Brigade Hotel Ventures Limited and Sellowrap Industries Limited will also conclude this actions will rely on how foreign institutional investors (FIIs) behave. On Friday, FIIs sold shares worth Rs 1,979.96 crore while the domestic institutional investors (DIIs) were net buyers at Rs 2,138.59 remaining net buyers for the last three months, FIIs have been net sellers so far in July at Rs 6,503 crore."The chart structure has clearly deteriorated for the bulls. On the daily chart, Nifty had been trading within a rising channel pattern since May. However, this week's breakdown below the channel's lower boundary confirms a bearish reversal. Importantly, this breakdown is accompanied by a bearish gap, which qualifies as a breakaway gap, adding further conviction to the bearish setup," Bhosale the index has broken below the 50-day EMA, a level that had previously provided strong support. Collectively, these signals suggest the potential for deeper downside, possibly towards the 200-day SMA, which lies in the 24200–24000 zone. For the coming week, immediate support is placed near the 89-day EMA at 24650, followed by the 24500 level, which has acted as a strong base during the May–June consolidation phase. On the upside, the bearish gap and the 50DEMA zone around 24950–25000 now act as immediate resistance, while the 25250 level, the high of the last two weeks, remains a stiff barrier," this analyst Indian rupee fell to a one-month low on Friday, and logged its third straight weekly decline, pressured by outflows from local stocks and caution among investors ahead of a news-heavy week dominated by tariffs and central bank decisions. The rupee closed at 86.5150 against the U.S. dollar on Friday, down 0.4% on the week. The local currency hit a low of 86.6250 earlier in the session, its weakest level since June sales from local private banks, likely on behalf of exporter clients, helped limit the rupee's losses, a trader at a Mumbai-based bank dollar index was up 0.2% at 97.7 while Asian currencies declined by as much as 0.7%.Rupee's movement against the dollar will likely be keenly watched through the week as the greenback would react to the Fed announcements and tariff oil prices remain critical for the stock markets as they have the potential to alter the inflation dynamics in a country. Oil prices fell sharply on Friday at a three-week low as traders were worried about negative economic news from the U.S. and China and signs of growing US WTI oil contracts ended at $65.07, down by $0.96 or 1.45% while Brent oil futures were hovering near $68.44, higher by $0.79 or 1.14%.(Inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Mint
21-07-2025
- Business
- Mint
Closing Bell!Vinay Rajani of HDFC Securities suggests these stocks to buy for short-term
Stock market today: Indian stock markets started the week on a subdued note on Monday, with both key indices opening flat as investor sentiment remained weak due to ongoing uncertainty surrounding the India-US trade agreement. However, the indices saw some recovery during the session. At 14:24 IST, the Nifty 50 index was at 25,037 . 50, up by 68.70 points or 0.28 percent, while the BSE Sensex was trading at 82,020.49, reflecting an increase of 262.76 points or 0.32 percent. In the early trading session, both indices fell back, reversing their initial gains. This decline followed three straight weeks of losses and marks ten months since Indian indices last reached their all-time highs in September 2024. Analysts suggest that the stalled progress in the fifth round of India-US trade negotiations is undermining investor confidence. The Nifty 50 concluded last week with its third consecutive weekly decline, finding resistance at its 20-day Exponential Moving Average (EMA) and extending its short-term downtrend by forming lower tops and lower bottoms on the daily chart. Over the past two trading sessions, the Nifty 50 has attempted a recovery from the crucial 50-day EMA support at 24,937, a level that has remained unviolated since April 2025. A decisive close below this 50-day EMA could significantly weaken the Nifty 50's technical setup. The recent swing high of 25,255 is anticipated to serve as a strong resistance level for the index. Globally, Asian, emerging, and developed market indices continue their uptrend. In contrast, Indian markets have underperformed year-to-date, with the Nifty 50 gaining only 4% compared to significant surges in markets like KOSPI, Hang Seng, and Taiwan, which have soared 30%, 25%, and 24% respectively. This strong technical setup in global markets could potentially act as a tailwind for Indian equities. Despite the recent correction, the Nifty 50's long-term bullish trend remains intact, as the index continues to hold above its 100-day and 200-day EMAs. The current decline appears to be a corrective phase within a broader uptrend. Previous swing lows between 24,500-24,600 are expected to provide strong support and should be considered opportune levels for initiating fresh long positions. Looking ahead, sectors such as Metal, Consumption, and FMCG are poised for strong performance in the coming months and warrant inclusion in investment portfolios. JSW Infra share price has broken out from symmetrical triangle pattern on the weekly chart. Price rise was accompanied by a jump in volumes. Stock price has been sustaining above 50 DEMA and 200 DEMA. Weekly RSI has reached above 50, indicating a sustainable up trend. Weekly MACD is now placed above signal and equilibrium line. ETF has surpassed 50 DEMA resistance. Price has also broken out from a downward sloping trend line on the daily chart. The price breakout is accompanied by jump in volumes. The price chart has formed a strong base near 21.50 and has turned bullish. Daily RSI has reached above 50, indicating sustained uptrend for the underlying. Daily MACD has given positive crossover on its signal line. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
