Thread by @nooreshtech

#TweetStorm - #RSI hits 23 on #Nifty. Converting this long post on nooreshtech.co.in/2020/03/what-h… into a #tweetstorm. Let us see whenever #RSI hits the 20-25 band on #Nifty what has been the market movement in last 10-12 years.

#RSI 23. #Nifty 10782 on 5th August 2019
Nifty 10637 on 23rd August 2019 . Positive Divergence
A higher bottom on 19th September at 10670.
1.3% lower and major rally started after 1.5 months.
breaks the sloping trendline and short term bottom . Support at previous bottoms 10600

#RSI 22. #Nifty 10261 on 5th October 2018
10138 on 11th October. Positive Divergence.
3rd Bottom at 10004 on 26th October 2018. Triple Positive Divergence.
2.5 % lower on the bottom and the rally after 3 weeks.
trendline and 2 lows got taken out. Support at previous major bottoms

#RSI hits a low of 22.5. #Nifty hits a low of 7916 on 21st November 2016.
Next Bottom at 7893 on 26th December 2016. Positive Divergence with RSI at 32
Marginally lower and the rally started.Almost a month.
Support taken at previous breakout and Retest. Co-incided the Brexit.

RSI 24.5. Nifty 7770 on 24th August 2015.
2nd bottom at 7545 on 07th September 2015. Positive Divergence.
Bottom at 2.8% lower and rally started with an interim higher bottom.
Rally fizzled at 10%. #Dow retested these lows by a small margin but Nifty at 6900 in February 16.

RSI hit 24 . Nifty 4720 25th August 2011. ( An interim bounce to 5360)
2nd at 4640 on 21st November 2011. Positive Divergence.
3rd at 4530 on 20th December 2011. Triple Positive Divergence.
4% lower and a 20% rally in 2 months. Took almost 4 months. Gold top World Bottom.

Quick Bottom in January 2008 with a RSI hit of 17-18.Two lower circuits.
Retest and a bounce of 15%.
Broke supports in June 2008.
RSI bounce of 20% in July 2008.
RSI Divergence Flopped big time in end of 2008. ( 10k to 8k in a week and back to 10k in a week.) VIX hit 85 in 2008.

10-15 years major bottoms in Nifty when it hits the sub 25 band.
The next low or triple divergence is 0-5% lower.
The bottoming out has taken between 3-6 weeks generally apart from 2011.
Apart from 2015 bounce just 10%. Global bottomed.
CBOE VIX hit 45 in 2018/2015/2011.

#Nifty in 2020 - CBOE Vix at 45+ with S&P 500 and Dow Jones showing sub 20 RSI is a very similar fear situation like 2018/2015/2011 .
In such periods a lot of supports do get broken for a few weeks. Like 11600 is gone and now we are testing 11000-11200 channel.

If looking at history to repeat the bottoming out could take 2-4 weeks and not very far from current zone.
Even if there is no retest and positive divergence in coming weeks one may look for confirmation by crossing of intermediate highs in between the next few weeks.

What excites me is the fact that every time that I have seen 45-50 VIX and 20-25 RSI it gives me jitters but the next 1 year has been very rewarding !!
Also even today the broader markets and smallcap indices present very interesting opportunities. Time to work harder