$ZK Strong strategy for capturing rebounds: combining Fibonacci + RSI divergence
One of the strongest ways to enter after a short downward wave within an uptrend is to combine:
1️⃣ Fibonacci levels to know where the correction might stop
2️⃣ Hidden positive divergence on the RSI to confirm the continuation of the upward trend
Method of operation:
• Identify the bottom of the trend and then its peak.
• Pull the Fibonacci from the bottom to the peak.
• Monitor the levels of 38.2% – 50% – 61.8% as they are the strongest rebound areas.
• If the price rebounds from the 50% area or close to it, this is a preliminary signal.
Basic entry signal:
When the price drops to a strong fib level (like 50%)
and a hidden positive divergence forms on the RSI
(the price makes a lower low while RSI makes a higher low)
➡️ Here we consider that the correction has ended, and it is expected to continue rising.
📈 Entry:
After a reversal candle appears at the fib level, preferably above 38.2%.
📉 Stop loss:
Below the 61.8% Fibonacci level.
🎯 Exit targets:
• First target at 38.2%
• Second target at the previous peak level
• And you can continue if buying power appears
Why does this method work?
Because divergence tells you that the true momentum of the rise has not ended, and Fibonacci tells you exactly where the correction ends.
The combination of the two indicators gives you an early and accurate entry with very low risk.
Reference Livermore
