RSI Calculator (Relative Strength Index)
RSI Indicator Calculator
Calculate the Relative Strength Index from average gains and losses.
Relative Strength Index (RSI)
67.57
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Relative Strength Index (RSI) Oscillator Formula
Measures technical price velocity over 14 periods, indicating overbought (>70) or oversold (<30) conditions.
Worked Example: 14-day average gains exceed average losses by 3 to 1
Relative Strength Index: Trading overbought and oversold extremes
Vijay tracked a stock that rallied sharply. The price rose for 10 consecutive days, and retail traders were buying aggressively. Vijay checked the RSI oscillator.
The 14-period RSI was at 75.0 (Overbought zone). Recognizing that the momentum was stretched, Vijay avoided buying at the peak, saving himself from the correction.
The RSI measures price velocity and momentum over 14 periods, indicating overbought (>70) or oversold (<30) conditions.
An overbought RSI does not mean short immediately. In strong uptrends, RSI can remain overbought for extended periods.
Frequently Asked Questions
What is the Relative Strength Index (RSI)?
RSI is a momentum oscillator that measures the speed and change of price movements on a scale from 0 to 100.
What do overbought and oversold mean in RSI?
Traditionally, an RSI above 70 indicates the stock is overbought (potentially due for a pullback), while an RSI below 30 indicates it is oversold (potentially due for a bounce).
Should I buy immediately when RSI drops below 30?
No. In strong downtrends, a stock can remain oversold for a very long time. RSI signals should be combined with other technical indicators for confirmation.
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