Below is a price and relative strength chart of Nifty PSE index from Jan 2017.
It has been underperforming Nifty consistently since 2017. There has not been a bullish setup in the relative strength chart since then. There were few instances of bullish breakout on price chart. If you have you know what is happening on relative strength chart, you get to know when to ignore bullish price action or when it should be traded only for short-term.
Another thing to notice is bearish divergence between price and relative strength at the top (Red arrows). Relative strength divergences are logical and useful observation. We will write more about this in next newsletter.
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