Failure Swings

Failure Swings. (also known as support or resistance penetrations or breakouts): This is where the RSI surpasses a previous high (peak) or falls below a recent low (trough).

Failure Swings
When the RSI goes above 70 or below 30 this is a strong indication that the market is ready for a reversal.
Support and Resistance ...

Failure Swings
Failure swings, in overbought or oversold territory, signal that a trend is weakening and likely to reverse. They also add weight to other signals and are identified by either: ...

Failure Swings
The inability of price to reaffirm a new high in an uptrend or a new low in a downtrend.

Failure ...

Failure swings are used as indicators for an impending reversal. It focuses mainly on the price action.

Failure swings occur when in a downtrend the RSI fails to set a new low and then goes on to set a new high or in an uptrend when the RSI fails to set a new high and then goes on to set a new low.
Rally ...

"(3) Failure Swings: Failure swings above 70 or below 30 are very strong indications of a market reversal. (See Fig. 6.3 and Fig. 6.4)" ...

These failure swings can lead to divergences between the price action and the RSI. For example, a divergence occurs when a market makes a new high or low, but the RSI fails to set a matching new high or low.

Finally, failure swings from the 20 or 80 levels can also be used to identify potential price reversals and trade entries.

Failure Swings
Wilder, too, is considered a failure swings as strong indications of an impending reversal. Failure swings are independent of the price action.

Failure swings above 70 or below 30 which can warn of coming reversals
Support and resistance levels
Divergence between the RSI and price which is often a useful reversal indicator ...

It can show the following information: Movement can be not at once clear on the bar chart Failure swings over 70 or under 30 which show reversals Support and resistance.

Movement which might not be as readily apparent on the bar chart
Failure swings above 70 or below 30 which can warn of coming reversals
Support and resistance levels
Divergence between the RSI and price which is often a useful reversal indicator ...

Failure Swings: the RSI breaks above a previous high or falls below a recent low. Support and Resistance: The RSI can sometime illuminate internal support and resistance better than price itself. Divergences: as discussed above.

It can be also used to generate signals for divergences, failure swings (i.e. strong indications of market reversal) and centerline cross-overs (i.e. the RSI value moves over the centerline of the RSI scale).

Wilder's relative strength index (RSI), commodity channel index (CCI), and Bollinger bands (BBs). For the RSI, I look for divergence (price moves one way and the indicator goes the other way), over bought/over sold signals, and failure swings.

See also: Swing, Failure, Indicator, Swings, Divergence