Relative Strength Indicator (RSI)

What Is Relative Strength Indicator (RSI)

RSI is an indicator of overbought or oversold conditions.
Plotted on a vertical scale from 0 to 100 this indicator shown overbought when values are above 70 and considered oversold when values are below 30.

Example Of RSI Divergence:

1. A Bearish Divergence

A stock price makes a higher high but the RSI makes a lower high indicating posssible trend reversal. Stay on your toes get ready for other signals indicating time to exit a position.

2. A Bullish Divergence

A stock price makes a lower low but the RSI makes a higher low indicating posssible trend reversal. Stay on your toes get ready for other signals indicating time to exit a position.