RSI (Relative Strength Index)

Category: science

A momentum oscillator that measures the speed and change of price movements on a scale from 0 to 100.

RSI is used to identify overbought or oversold conditions. A reading above 70 typically signals that a stock is "overbought" and due for a pullback; a reading below 30 suggests the stock is "oversold" and potentially undervalued, representing a bounce-back opportunity.

Common Examples

• The RSI indicator reached 82, indicating the stock was dangerously overbought and likely to see a sharp corrective dip in the coming sessions.
• We use the RSI indicator in our automated trading scripts to trigger sell orders when momentum exceeds the historical overbought threshold.