--- title: RSI and MACD momentum indicators in technical analysis description: Master Wilder RSI 14 and MACD 12-26-9 formulas, divergence patterns, and critical momentum indicator limitations in strong trends using 2026 data. url: https://ginity.vn/en/blog/rsi-macd-momentum-indicators canonical: https://ginity.vn/en/blog/rsi-macd-momentum-indicators markdown: https://ginity.vn/en/blog/rsi-macd-momentum-indicators.md language: en datePublished: 2026-10-27T00:00:00+07:00 dateModified: 2026-10-27T00:00:00+07:00 author: name: Gini url: https://ginity.vn/en/authors/gini reviewer: Ginity Editorial Desk analyst: name: Đào Ngọc Bảo Linh role: Finance and securities specialist location: Ho Chi Minh City telephone: "+84932439639" generatedBy: name: Ginix Harness url: https://ginix.vn desk: id: learn name: Learn investing url: https://ginity.vn/en/learn tickers: - VNINDEX - HPG sources: - name: Government Regulatory Database url: https://vanban.chinhphu.vn/?docid=202222&pageid=27160 title: Decree No. 155/2020/ND-CP detailing the implementation of certain articles of the Law on Securities - name: Government News Portal url: https://baochinhphu.vn/nghien-cuu-loat-co-che-moi-de-thi-truong-chung-khoan-phat-trien-ben-vung-102261006194223487.htm title: Researching updated mechanisms for sustainable stock market development - name: StockCharts ChartSchool url: https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/relative-strength-index-rsi title: Relative Strength Index (RSI) - name: StockCharts ChartSchool url: https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/macd-moving-average-convergence-divergence-oscillator title: MACD (Moving Average Convergence/Divergence) Oscillator - name: VnEconomy url: https://vneconomy.vn/vn-index-quay-dau-giam-thi-truong-chung-lai-truoc-khang-cu-1780.htm title: VN-Index declines, market stalls ahead of 1780 resistance - name: Vietstock url: https://vietstock.vn/2026/01/goc-nhin-2901-chuyen-sang-giai-doan-dieu-chinh-145-1396413.htm title: "Market Outlook 29/01: Shifting to adjustment phase?" publisher: Ginity attribution: 'Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content.' disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources." usageTerms: https://ginity.vn/ai.txt --- # RSI and MACD momentum indicators in technical analysis > Master Wilder RSI 14 and MACD 12-26-9 formulas, divergence patterns, and critical momentum indicator limitations in strong trends using 2026 data. Gini · Learn investing · 2026-10-27 · https://ginity.vn/en/blog/rsi-macd-momentum-indicators _Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_ ## Key takeaways - The 14-period Wilder RSI measures relative price strength on an oscillator scale bounded between 0 and 100 points. - The standard MACD line is constructed from the spread between 12-period and 26-period EMAs against a 9-period signal line. - During aggressive trending regimes, RSI can remain pinned above 70 points for extended periods without immediate reversal. - On 26/10/2026, VN-Index closed at 1763.55 points as RSI momentum stalled ahead of the 1780 resistance threshold. In technical analysis, tracking nominal price trends establishes direction but fails to capture velocity and underlying buying power. An asset can advance while its incremental price gains diminish, or correct sharply before moving averages reflect any structural shift. To measure price acceleration and detect internal trend exhaustion, analysts rely on momentum indicators. The two primary instruments are the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). This guide details their mathematical architecture, formulas, divergence mechanics, and practical limitations across trending regimes. ## How RSI works and the Wilder calculation formula According to educational materials from [StockCharts ChartSchool](https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/relative-strength-index-rsi), the Relative Strength Index was developed by J. Welles Wilder Jr., introduced in his text *New Concepts in Technical Trading Systems*. RSI is a bounded oscillator operating from 0 to 100 points, measuring recent price change velocity to determine whether buyers or sellers dominate market momentum. According to the standardized formula published by J. Welles Wilder Jr., the default observation window is 14 trading sessions. To determine the RSI value at session 14, the calculation classifies daily closing price changes relative to the preceding close. When the current close exceeds the previous close, the gain equals the price difference while the loss is zero. Conversely, when the close declines, the gain is zero and the loss equals the absolute value of the price drop. Following the initial 14 sessions, the baseline average gain and baseline average loss are calculated using a simple arithmetic mean: the initial average gain equals the sum of gains over 14 sessions divided by 14, and the initial average loss equals the sum of losses divided by 14. The relative strength ratio (RS) is derived by dividing average gain by average loss: $$ \text{RS} = \frac{\text{Average Gain}}{\text{Average Loss}} $$ The standardized RSI is then computed on the 0 to 100 scale using the equation: $$ \text{RSI} = 100 - \frac{100}{1 + \text{RS}} $$ From day 15 onward, Wilder applied a smoothed moving average technique to prevent abrupt step changes: $$ \text{Smoothed Average Gain} = \frac{\text{Previous Average Gain} \times 13 + \text{Current Gain}}{14} $$ $$ \text{Smoothed Average Loss} = \frac{\text{Previous Average Loss} \times 13 + \text{Current Loss}}{14} $$ Wilder defined readings above 70 points as overbought and values below 30 points as oversold. ## Structural mechanics of MACD and histogram According to technical analysis materials from [StockCharts ChartSchool](https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/macd-moving-average-convergence-divergence-oscillator), the Moving Average Convergence Divergence indicator merges trend-following properties with momentum measurement through the spread between two exponential moving averages (EMAs). Under standard technical design, the MACD architecture consists of three interconnected elements: The primary MACD Line represents the spread between a short-term 12-period exponential moving average and a long-term 26-period exponential moving average of closing prices: $$ \text{MACD Line} = \text{EMA}(12) - \text{EMA}(26) $$ The Signal Line serves as a smoothing mechanism, computed as a 9-period exponential moving average of the MACD Line: $$ \text{Signal Line} = \text{EMA}(9)\text{ of MACD Line} $$ The MACD Histogram measures the absolute distance between the two lines: $$ \text{MACD Histogram} = \text{MACD Line} - \text{Signal Line} $$ According to the mechanics of this indicator system, when the MACD Line trades above the zero line, the 12-period EMA exceeds the 26-period EMA, confirming that short-term price momentum is more constructive than the intermediate-term baseline. Crossovers between the MACD Line and the Signal Line dictate histogram expansion: the histogram turns positive when the MACD Line crosses above the Signal Line, and shifts negative when it crosses below. ## Indicator comparison and worked calculation example The table below contrasts the fundamental technical characteristics of both momentum instruments: | Analysis Dimension | Relative Strength Index (RSI) | Moving Average Convergence Divergence (MACD) | | :--- | :--- | :--- | | Calculation basis | Ratio of average gains to average losses | Spread between two exponential moving averages | | Tool classification | Bounded price velocity oscillator | Trend-following momentum indicator | | Value domain | Strictly bounded between 0 and 100 points | Unbounded nominal spread around zero line | | Default parameters | 14-period smoothed moving average | 12-period, 26-period, and 9-period EMAs | | Primary analytical cues | Overbought (>70), oversold (<30), divergence | Signal line crossovers, zero line crossovers, divergence | | Response latency | Responsive to short-term closing changes | Structural lag derived from exponential smoothing | Source: Ginity compilation and calculation. To demonstrate the arithmetic sequence, our calculation model examines a hypothetical 15-session price series for a listed stock with a base price at 30,000 VND in 2026. Across the initial 14-session calibration period in 2026, price gains during positive sessions totaled 4,200 VND, while declines during negative sessions totaled 1,400 VND. According to our calculation within the 2026 model, the baseline values for the 14-period cycle resolve as follows: the initial average gain equals 4,200 divided by 14, yielding 300.00 VND; the initial average loss equals 1,400 divided by 14, yielding 100.00 VND; the resulting relative strength ratio RS equals 300.00 divided by 100.00, producing 3.0000. Applying Wilder's formula, the RSI at session 14 reaches exactly 75.00 points. At session 15 of the 2026 test model, assuming the market advances further and the closing price reaches 33,400 VND, the price gain is 600 VND over session 14 with zero loss. Applying the smoothing technique developed by Wilder, our calculation computes the smoothed average gain for session 15 as [(300.00 x 13) + 600.00] divided by 14, reaching 321.43 VND. The smoothed average loss equals [(100.00 x 13) + 0.00] divided by 14, arriving at 92.86 VND. The updated RS ratio equals 3.4615, establishing the session 15 RSI at 77.59 points. According to our calculation for the MACD system at session 15 within the 2026 data series, assuming the 12-period EMA reaches 32,596.11 VND and the 26-period EMA stands at 31,964.86 VND, the resulting MACD Line is computed at 631.25 VND. With the 9-period Signal Line tracking at 510.25 VND in the 2026 series, the MACD Histogram registers a positive reading of 121.00 VND. These figures illustrate ongoing positive momentum, while the 77.59 RSI reading indicates that the asset has entered deep overbought territory. ## Detecting momentum exhaustion through price divergence One of the most valuable technical applications of momentum tools is the identification of divergence between price trajectories and indicator readings. Divergence materializes when market price action establishes a fresh extreme while the indicator fails to validate that move, exposing an internal exhaustion of buying or selling pressure. Two primary divergence patterns govern momentum analysis: Bearish divergence develops during an uptrend when the price forms a higher swing high while the momentum oscillator records a lower high. This divergence demonstrates that although prices continue upward due to residual buying momentum, the internal velocity and buying power supporting the advance are dissipating, warning of an impending consolidation or pullback. Bullish divergence occurs during a downtrend when price establishes a lower swing low while the indicator prints a higher low. This configuration confirms that aggressive selling pressure is decelerating and accumulation is emerging beneath the surface, signaling an approaching stabilization or potential recovery. Market conditions in 2026 provide empirical evidence of momentum divergence dynamics. According to trading data recorded by VnEconomy on 26/10/2026, the benchmark VN-Index closed at 1763.55 points following a decline of 10.60 points, while the HNX-Index retreated 3.38 points to settle at 259.32 points. A technical assessment by Bao Viet Securities (BVSC) noted that the index met profit-taking pressure near the 1780 resistance threshold, with the RSI indicator stalling near short-term peaks while the MACD Line preserved its positive spread above the signal line (See details at [VnEconomy](https://vneconomy.vn/vn-index-quay-dau-giam-thi-truong-chung-lai-truoc-khang-cu-1780.htm)). Earlier that year, momentum indicators signaled shifting phases. According to market commentary compiled on 29/01/2026 by Vietstock, Saigon - Hanoi Securities (SHS) assessed that the VN-Index faced consolidation pressure following a 5-week advance; meanwhile, Vietcombank Securities (VCBS) noted on the daily chart that momentum indicators RSI and MACD pointed downward as the index moved toward support at 1,776 points (See details at [Vietstock](https://vietstock.vn/2026/01/goc-nhin-2901-chuyen-sang-giai-doan-dieu-chinh-145-1396413.htm)). Evaluating both tools concurrently allows observers to distinguish between healthy pullbacks and structural breakdowns. ## Limitations of RSI and MACD in strong trend regimes While highly effective during range-bound consolidation phases, momentum indicators exhibit systemic limitations when market regimes transition into aggressive, persistent trends. The primary limitation of RSI is oscillator pinning, known as the overbought or oversold trap. During strong bull trends, RSI readings frequently surpass 70 points and remain elevated for weeks. Assuming an overbought reading mandates immediate reversal causes analysts to exit winning trends prematurely. Conversely, in severe downtrends, RSI can languish below 30 points for extended intervals without a technical rebound. For MACD, the main constraint stems from mathematical lag and false crossover signals during consolidation regimes. Because exponential moving averages incorporate historical price data, substantial movement has unfolded by the time the MACD Line produces a confirmed crossover. In narrow trading ranges, moving average lines repeatedly interlace, producing false signals. According to reporting on 06/10/2026 from the [Government News Portal](https://baochinhphu.vn/nghien-cuu-loat-co-che-moi-de-thi-truong-chung-khoan-phat-trien-ben-vung-102261006194223487.htm), regulatory authorities are studying stock board segmentation based on four criteria: charter capital size, foreign ownership ratio, free-float ratio, and regulatory compliance status. Combining higher-timeframe trend analysis, oscillator thresholds, and volume confirmation establishes a balanced foundation for market evaluation. ## Sources - Government Regulatory Database: [Decree No. 155/2020/ND-CP detailing the implementation of certain articles of the Law on Securities](https://vanban.chinhphu.vn/?docid=202222&pageid=27160) (31/12/2020) - Government News Portal: [Researching updated mechanisms for sustainable stock market development](https://baochinhphu.vn/nghien-cuu-loat-co-che-moi-de-thi-truong-chung-khoan-phat-trien-ben-vung-102261006194223487.htm) (06/10/2026) - StockCharts ChartSchool: [Relative Strength Index (RSI)](https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/relative-strength-index-rsi) (14/09/2026) - StockCharts ChartSchool: [MACD (Moving Average Convergence/Divergence) Oscillator](https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/macd-moving-average-convergence-divergence-oscillator) (14/09/2026) - VnEconomy: [VN-Index declines, market stalls ahead of 1780 resistance](https://vneconomy.vn/vn-index-quay-dau-giam-thi-truong-chung-lai-truoc-khang-cu-1780.htm) (26/10/2026) - Vietstock: [Market Outlook 29/01: Shifting to adjustment phase?](https://vietstock.vn/2026/01/goc-nhin-2901-chuyen-sang-giai-doan-dieu-chinh-145-1396413.htm) (29/01/2026) --- _Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._ _Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._