TSI Oil Technical Analysis & TSI Trading Signals

TSI Technical Indicator

Developed by William Blau

TSI is a momentum indicator. The TSI is drawn by using a momentum calculation that reacts faster and is more responsive to crude trading price changes, making it a leading indicator that follows crude trading price action direction closely in the crude oil market.

The TSI is drawn as a blue-line, the indicator also plots a signal line which is drawn as a red-line, & these 2 lines are used to generate cross-over signals.

TSI also plots a histogram which shows the difference between the TSI Line & the Signal Line. This histogram crosses above or below the center-lines, histogram levels above the center line shows a bullish cross-over signal, while center line levels below the center line shows a bearish crossover signal.

Oil Technical Analysis & How to Generate Crude Trading Signals

The TSI uses various methods to generate oil signals. This oil indicator can be used in the same way as the RSI to determine general oil trend direction of the markets. Overbought and oversold levels can also be shown using TSI. The most common methods of generating trading signals are:

Zero line Oil Trading Crossover ( Histogram Oil Trading crossover not Lines Crude Trading crossover)

• Buy - when the histogram crosses above the 0 a buy is generated
• Sell - when the histogram crosses below 0 a sell is generated

Crude Trading Signal line Oil Trading Crossover

• A buy is generated when the TSI line crosses above the Signal-line
• A sell is generated when the TSI line crosses below Signal-line

This signal is the same as the one above & the timing corresponds to the time when the histogram crossovers happen.

Divergence Crude Oil

Divergence is used to look for potential oil trend reversal point of a crude oil. Reversal divergence setups are:

Classic Oil Trading Divergence

Oil Classic Bullish Divergence: Lower lows in crude oil price and higher lows on the indicator

Oil Classic Bearish Divergence: Higher highs in crude oil price and lower highs on the indicator

Divergence trading can also be used in identifying potential oil trend continuation points in crude oil price action direction. Continuation divergence trading setups are:

Hidden Crude Trading Divergence Setup

Oil Trading Hidden Bullish Divergence: higher lows in crude oil price and lower lows on the indicator

Oil Trading Hidden Bearish Divergence: lower highs in crude oil price and higher highs on the indicator

Oversold/Overbought Levels on Technical Indicator

This can be used to identify overbought and over-sold conditions in crude oil price action movements.

• Overbought condition - levels being greater than the +25 level
• Oversold condition - levels being less than the -25 level

Trades can be generated when the TSI crosses these levels.

Buy oil signal - when the areas cross above -25 level a buy is generated.

Sell oil signal - when the levels cross below +25 level a sell is generated.

Oversold

Overbought

The overbought/oversold levels are indicated using horizontal lines drawn at the +25 & -25 levels.