Relative Strength Index


RSI. A technical analysis indicator which measures the magnitude of gains over a given time period against the magnitude of losses over that period. The equation is RSI = 100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of RSI periods. The value can range from 1 to 100. Some technical analysts believe that a value of 30 or below indicates an oversold condition and that a value of 70 or above indicates an overbought condition.

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You should try and keep track of the relative strength index so that you know where things are standing at that time.

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Since their relative strength index came in around fifty, they felt they were in a very strong position at the company and were not too worried about being oversold.

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The broker from Fidelity advised Mr. smith not to buy shares in Apple at this time because the Relative Strength Index indicated that the price of the shares was beginning to fall.

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