RSI 85 Over bought how to signl Revesal - Find exhaustion
An RSI of 85 indicates extreme momentum , not an automatic reversal. In strong uptrends, prices often continue to rise while the RSI remains "overbought" for days or even weeks. [ 1 , 2 , 3 , 4 ] Traders identify the actual "stop" or reversal point by looking for exhaustion signals rather than just a high number. [ 1 , 2 , 3 ] 1. Watch for Bearish Divergence This is the most reliable "stop" signal. [ 1 , 2 ] The Setup: Price makes a higher high , but the RSI makes a lower high . What it means: The price is still going up, but the speed and strength of the buying are fading. The "fuel" for the move is running out. [ 1 , 2 , 3 , 4 , 5 ] 2. Monitor Price Action & Volume A high RSI is just a warning; price action provides the confirmation. [ 1 , 2 ] Volume Drop: If the price hits a new high but trading volume is lower than previous peaks, it shows a lack of conviction from buyers. Rejection Candles: Look for "Shooting Star" ...