RSI Divergence Crude Oil Technical Indicator Technical Analysis

Divergence trading concept is a concept where a trader will for a difference between the crude trading price movement with the movement of a technical trading indicator. For our examples we shall use the RSI technical indicator to explain divergence trading.

RSI indicator is one of the commonly used divergence trading indicator. This oil indicator is an oscillator similar to the RSI & it can be used to trade divergence setups just the same way as the RSI indicator.

RSI Crude Oil Technical Analysis & RSI Trading Signals

RSI Divergence Technical Indicator

RSI Divergence Technical Indicator

Classic RSI Bullish Crude Oil Trading Divergence Setup

RSI classic bullish divergence occurs when crude oil price is forming lower lows ( LL ), but the RSI technical indicator is forming higher lows ( HL ).

Oil Classic Bullish Divergence - RSI Oil Divergence Definition

RSI classic bullish divergence warns of a possible change in the oil trend from down to up. This is because even though the crude oil price went lower the volume of sellers that pushed the crude oil price lower was less as shown by the RSI technical technical indicator. This is an technical indicator of the underlying weakness of the downward trend.

Hidden RSI Bullish Oil Trading Divergence Setup

Forms when crude oil price is forming a higher low ( HL ), but the RSI technical indicator is showing a lower low ( LL ).

RSI hidden bullish divergence occurs when there is a retracement in an upward crude oil trend.

Oil Hidden Bullish Divergence - RSI Oil Divergence Definition

This setup confirms that a retracement move is complete. This RSI divergence setup indicates underlying strength of an upward crude oil trend.

RSI Divergence Technical Indicator

Hidden RSI Bearish Crude Oil Trading Divergence Setup

Forms when crude oil price is forming a lower high ( LH ), but the oscillator technical indicator is showing a higher high ( HH ).

Hidden bearish divergence occurs when there's a retracement in a downward crude oil trend.

Oil Hidden Bearish Divergence - RSI Oil Divergence Definition

This setup confirms that a retracement move is complete. This divergence indicates underlying strength of a downwards crude oil trend.

RSI Classic bearish Oil Trading Divergence Setup

RSI classic bearish divergence occurs when crude oil price is showing a higher high ( HH ), but the RSI technical indicator is forming a lower high ( LH ).

Oil Classic Bearish Divergence - RSI Oil Divergence Definition

RSI Classic bearish divergence warns of a possible change in oil trend from up to down. This is because even though the crude oil price went higher the volume of buyers who pushed the crude trading price higher was less as illustrated by the RSI technical indicator. This is an technical indicator of the underlying weakness of the upward trend.