What is the Stochastic 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 Stochastic RSI Used: The Stochastic RSI (StochRSI) is a momentum oscillator that applies the Stochastics formula to Relative Strength Index (RSI) values for a stock, ETF, or other market/instrument. 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 Stochastic RSI Consist of: Stochastic RSI is presented as two lines fluctuating close together and bounded between 0-100. Typically, values above 80 indicate overbought or overvalued conditions, which may signal an impending downside trend reversal or corrective pullback in price. Values below 20 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 Stochastic RSI Look Like:
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