FirstRand - Area of interest

- Price has pulled back from its recent swing high of R74.75

- Currently in a support zone where i will look to open a starter position and add to as the price action develops.

- RSI deeply oversold with a relief bounce likely.

- Only below R60 do i turn bearish on the overall picture.


The Relative Strength Index (RSI) is a popular momentum indicator used by traders to evaluate overvalued or undervalued conditions in the price of a security. It measures the speed and magnitude of a security’s recent price changes and is displayed as an oscillator on a scale of zero to 100. The RSI can provide insights into bullish and bearish price momentum, and it is often plotted beneath the graph of an asset’s price.

Traders use the RSI in various ways to support their trading decisions. Here are some common applications:

Overbought and Oversold Conditions: An RSI reading of 70 or above indicates an overbought situation, suggesting that the security may be due for a price correction1. Conversely, an RSI reading of 30 or below indicates an oversold condition, suggesting that the security may be undervalued and due for a potential rebound.

Trend Reversals: The RSI can help identify potential trend reversals or corrective pullbacks in price1. Traders look for divergences between the RSI and the price chart to spot potential shifts in market sentiment.

Buy and Sell Signals: Traders often use the RSI line crossing below the overbought line or above the oversold line as a signal to buy or sell1. However, it’s important to note that the RSI works best in trading ranges rather than trending markets.

It’s worth mentioning that the RSI is just one tool among many used by traders. It is often used in conjunction with other technical indicators to develop comprehensive trading strategies.