Bullish RSI divergence: does it predict a bounce?
A bullish divergence is when price makes a lower low but RSI makes a higher low. Selling is losing force even as price falls.
When “Bullish RSI divergence” appeared, NIFTY 200 stocks were higher 12 trading days later 51.8% of the time, against 55.3% after any day: worse than a random day: the opposite happened more often than usual.
| After | Higher | Average move | Median move | Higher after any day |
|---|---|---|---|---|
| 5 trading days | 55.4% | +0.6% | +0.6% | 53.9% |
| 12 trading days | 51.8% | +0.6% | +0.4% | 55.3% |
| 20 trading days | 54.6% | +1.5% | +0.8% | 56.8% |
Year by year
| Year | Signals | Higher after 12 days | Any day |
|---|---|---|---|
| 2021 | 59 | 61.0% | 54.4% |
| 2022 | 129 | 43.4% | 52.1% |
| 2023 | 98 | 65.3% | 61.3% |
| 2024 | 91 | 46.2% | 53.7% |
| 2025 | 123 | 49.6% | 53.1% |
| Large cap only | 247 | 53.8% | |
| Mid cap only | 253 | 49.8% |
What it is
A bullish divergence is when price makes a lower low but RSI makes a higher low. Selling is losing force even as price falls.
How we detected it
Over the last ~45 days, price makes a lower swing low (the latest within 10 days) while RSI at that low is at least 4 points above RSI at the earlier low, which was below 40.
How traders read it
It suggests sellers are tiring. Traders usually wait for a sign that buyers have stepped in, such as a close back above the 20 EMA.
A signal is a probability, not a promise
Even the most reliable signal in this study was followed by the opposite move 37% of the time. A signal tilts the odds; it doesn’t decide the outcome.
Signals work better when they agree with the trend and with each other. Whatever the signal, decide your stop-loss before you act.
Practise spotting it, free
The RSI chapter teaches this signal in five minutes, then you call real NSE charts and get graded on your reasoning.
Common questions
Does the bullish RSI divergence signal work on Indian stocks?
When “Bullish RSI divergence” appeared, NIFTY 200 stocks were higher 12 trading days later 51.8% of the time, against 55.3% after any day: worse than a random day: the opposite happened more often than usual. No single signal is reliable on its own; traders combine it with the trend and manage risk with a stop-loss.
How often did stocks rise after this signal?
Across 500 signals on 168 NIFTY 200 stocks (2021–2025), the price was higher after 5, 12 and 20 trading days 55.4%, 51.8%, 54.6% of the time. After any day it was 53.9%, 55.3%, 56.8%.
How is “Bullish RSI divergence” defined here?
Over the last ~45 days, price makes a lower swing low (the latest within 10 days) while RSI at that low is at least 4 points above RSI at the earlier low, which was below 40.
How these numbers were made
We ran the same signal detector MarketSeekho uses to grade players over every trading day of 187 NIFTY 200 stocks, Jan 2021 to Oct 2025, using NSE end-of-day prices (1,54,833 stock-days). We counted the first day a signal appeared, then ignored the same signal on the same stock for 12 trading days so results don’t overlap. Windows with splits, bonuses or trading halts were left out.
“Any day” is the baseline: the same measure after every day in the data, signal or not. It matters because 2021–2025 was mostly a rising market, so stocks were higher after 12 days more often than not anyway. Past results don’t predict future ones, and this is not investment advice.