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Investment
Relative Strength Index
An oscillator that measures whether a stock is overbought or oversold on a scale of 0 to 100.
The RSI was developed by J. Welles Wilder. It is one of the most popular momentum oscillators. It works best in ranging markets and is often used together with moving averages or trend lines.
It's a thermometer for how 'hot' or 'cold' a stock's recent price moves have been.
Real world: An RSI above 70 usually means the stock is overbought and might pull back. An RSI below 30 means it is oversold and might bounce. Traders wait for these extremes before taking action.
💡 RSI tells you when a stock has run too far too fast — and might be ready to reverse.