RSI Support & Resistance by DGT

The RSI Support & Resistance by DGT indicator translates Relative Strength Index (RSI) threshold levels into dynamic price support and resistance zones to identify high-probability reversal and momentum areas. This tool maps oversold/overbought and bull/bear zones directly onto the price chart, providing a visual bridge between oscillator momentum and price action.

Usage

The Usage section describes how the script can be used to identify key market structures:

• Support & Resistance Zones: The indicator plots levels based on where the RSI crosses key thresholds. A cross above the overbought level (e.g., 70) marks a potential resistance zone, while a cross below the oversold level (e.g., 30) marks a potential support zone.
• Momentum Zones: The Bull Zone (RSI 60) and Bear Zone (RSI 40) levels act as dynamic areas of interest. In an uptrend, the RSI holding above the Bull Zone suggests sustained momentum, while falling below the Bear Zone indicates bearish dominance.
• Reverse RSI Levels: This feature projects the specific price required for the current bar to reach selected RSI thresholds. This is useful for anticipating future price targets and potential reaction points.
• RSI Overlay: Users can display the RSI oscillator directly on the price chart (top or bottom) to monitor momentum without looking at a separate pane.
• Bar Marking: Optional triangle shapes can be plotted above or below price bars when the RSI enters overbought or oversold conditions.

Details

The script calculates support and resistance by recording the price at the moment the RSI crosses a user-defined threshold. When a crossover occurs, the f_getPrice function captures either the average high or average low of the bar to establish the level.

The "Reverse RSI" calculation uses the current RSI components (Average Gain and Average Loss) to solve for the price value needed to hit a target RSI level (e.g., what price is needed for RSI to hit 70?). This provides a forward-looking metric that complements the historical levels generated by threshold crossings. The source for these calculations can be toggled between standard Price (close) or On Balance Volume (OBV) for volume-weighted momentum analysis.

Settings

RSI Settings

• Source: Selects the data used for RSI (Price or OBV).
• Length: Sets the lookback period for the RSI calculation.
• Overbought/Oversold: Defines the extreme thresholds for S&R zone generation.
• Bull/Bear Zones: Defines the momentum thresholds for mid-range support and resistance.
• Colors: Customizes the appearance of bullish, neutral, and bearish elements.

RSI S&R Zones

• Show RSI S&R Zones: Toggles the historical price levels on the chart.
• Zone Fills: Enables background coloring between momentum thresholds.
• RSI Overbought/Oversold Bar Marks: Enables triangle markers on price bars during extreme RSI readings.

Reverse RSI Labels

• Reverse RSI Price Levels: Displays labels at the right edge showing price targets for RSI thresholds.
• Reverse RSI Price Bands: Plots these price targets as continuous lines across the chart.

RSI Overlay Display

• Enable RSI Overlay: Toggles the visual RSI oscillator on the price chart.
• Placement: Positions the overlay at the top or bottom of the price action.
• Height: Adjusts the vertical scale of the oscillator overlay.

FAQ

How do I interpret the Support and Resistance zones? Zones are formed when the RSI crosses specific thresholds. For example, if the RSI crosses above 70, the price at that moment is marked as a resistance level. If the RSI later exits that zone, it may signal a weakening of that level.

What is the difference between "Price" and "OBV" sources? The "Price" source uses standard closing prices for RSI. The "OBV" (On Balance Volume) source uses volume-weighted data, which can help identify if momentum is being supported by significant trading volume.

How can I access the RSI Support & Resistance by DGT? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.