This RSI indicator is similar to other RSI tools but is divided into four distinct zones: 20-30-40 and 60-70-80. In this version, an RSI between 40 and 20 indicates weakness in the stock. When the RSI touches 20, it often signals a potential reversal (U-turn). However, in some cases, the reversal may occur around 30.
Similarly, when the RSI reaches 60, it may indicate the beginning of a bullish phase. The stock might reverse near 70 or 80, so we remain cautious in these zones. This segmentation provides a clearer understanding of market trends and helps in making more informed decisions.