Relative Strength Index


What is Relative Strength Index? The Relative Strength Index (RSI) is a momentum indicator used by technical analysts to gauge whether or not a market is overbought (bearish) or oversold (bullish). RSI was created by J. Welles Wilder in the late 1970s and is one of the most widely used technical indicators.


How to use RSI indicator?

The RSI scale is 0 to 100. Readings above 70 are typically considered overbought, readings below 30 are considered oversold. It is generally thought that an overbought market is trading above its fair value due to excess buying, while an oversold market is trading below its fair value due to excess selling.

RSI values are most often displayed on a separate chart, above or below the price chart, as in the image above showing the close for Apple stock on Tuesday, November 13, 2018.


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