Relative Strength Index (RSI)

Relative Strength Index, or RSI mean

A technical indicator used to compare the magnitude of recent gains to recent losses to determine overbought and oversold conditions in the market. . It can be calculated using the this formula:

RSI=100
100- 1+rs

readings below 20 refer to oversold, while readings over 80 indicate overbought. the RSI ranges from 0 to 100

The RSI is best used as a valuable complement to other stock-picking tools. Relative Strength Index, or RSI, is like the stochastic in that it means overbought and oversold conditions in the market.

RSI is a famous tool because it can be used to indicate the trend formations. When you find a trend is forming, you can take a look at the RSI and look at if it is up or under 50.