What is the Relative Strength Index (RSI): A chart indicator/oscillator used in the technical analysis of financial markets. Its primary purpose is to track market momentum, trend strength, and overbought/oversold conditions.
Category: Technical analysis indicator
How is the Relative Strength Index (RSI) Used: The Relative Strength Index (RSI) is an oscillator that compares bullish and bearish price momentum in a stock, ETF, or other market/instrument. RSI is one of the most commonly used indicators by traders and investors who employ technical analysis. It is most often used to generate and/or confirm trade entry and exit signals, determine overbought/oversold conditions, and find price-oscillator divergences.
What Does the Relative Strength Index (RSI) Consist of: RSI is presented as a line fluctuating and bounded between 0-100. Typically, RSI values above 70 indicate overbought or overvalued conditions, which may signal an impending downside trend reversal or corrective pullback in price. RSI values below 30 indicate oversold or undervalued conditions, which may signal an impending upside trend reversal or corrective rebound in price. The indicator is usually placed either above or below the price chart.
What Does the Relative Strength Index (RSI) Look Like:
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