Intercontinental Exchange (ICE): 60-Minute Bearish Alternate Bat Potential Reversal Zone (PRZ) and Bearish RSI BAMM Failure

The enlarged chart in Figure 6.92 clearly shows the decisive upside continuation through the PRZ. Although the general rule of thumb in the case of the 1.13 RSI BAMM incorporates a 1.618 extension as the stop loss limit, the pattern’s PRZ in this example of ICE signaled a violation much earlier.

Figure 6.92.

It is important to note that the same rules apply with the 1.618 RSI BAMM extension. The essence of determining the validity of an opportunity is to analyze the price action as it completes the pattern and retests the overbought RSI 70 level. If the action in both the price and the RSI decisively violates its respective technical levels, a significant continuation of the primary trend typically follows. Although it will require some time to effectively decipher these situations, the ability of these techniques to distinguish such opportunities is immensely accurate.