Dave uses Apple and the S&P 500 to show how the RSI range can point out three market stages: accumulation, distribution, and consolidation. He finds these stages long before the price itself shows them.
The 40‑level on the RSI gets special focus. When the RSI crosses this line, it can signal that a trend might be weakening or strengthening.
Momentum also plays a role. It can either confirm what the RSI is saying or challenge it. By looking at several time frames, investors can see turning points earlier and protect their trades.
Source: Materials provided by https://articles.stockcharts.com.Note: Content may be edited for style and length.