Sorry I forgot to illuminate what RSI is: The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. The indicator was originally developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, "New Concepts in Technical Trading Systems."
Although "Traditional"
interpretation and usage of the RSI are that values of 70 or above (yeah, right
0 indicate that a security is becoming overbought or overvalued, I have been using it in conjunction with the Guppy Method so I can be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition. But you cant use it in isolation. Unless you have money to burn!
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Re: Stocks
Originally Posted by NoSavingByTheBell
Sorry I forgot to illuminate what RSI is: The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. The indicator was originally developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, "New Concepts in Technical Trading Systems."
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