222
influenced with and what is trendsetting and go with the flow, however, some others like to take a contrarian approach. Regardless of your approach, there is no denying that if used correctly that social media can help you spot trends and prepare for reversals sooner than you may have otherwise done without.
Momentum Oscillators
Momentum oscillators are great indicators to help us find both potential tops and bottoms. The two most commonly used that you may be familiar with include the RSI and STO. Yes, we have previously talked about both in the past here at Cannainvestor, but they do play a significant role in helping us find bottoms that it is worth revisiting and reviewing.
RSI
We have all likely heard people mention that a stock is oversold or overbought. Chances are they are talking about the relative strength index (RSI). The RSI is a technical indicator we can use to help us find areas where stock appears to be oversold or overbought. There are times where these circumstances make sense, however, if there are no changes in the underlying company or sector then we can use the RSI to our advantage to find more opportune times to buy and sell when combined with our other indicators. The RSI calculation is derived from a formula that composes the average gain and loss. What you want to know is how to use it. When the RSI breaks above 70 it is considered overbought and is an area where you would consider selling or at least not an ideal time to consider buying. On the flip side, if the RSI falls below 30 then the opposite is true and can help us identify potential bottoms once the selling pressure eases up. Note that just because it breaches into oversold or overbought does not mean it will bounce back right away. It is best to be on guard when this happens and wait for some other signals to align or for the RSI to begin to turn back towards the middle. Here is a chart of Body and Mind inc - a multi-state operator showing how one can use the RSI to help for better buy and sell signals, or in this case help confirm bottoms.