The relative strength index (RSI) is a momentum indicator used in technical stock chart analysis. RSI measures the speed and magnitude of a security’s recent price changes to detect overbought or oversold conditions in the price of that security.
The RSI is displayed as a line graph oscillator on a scale of zero to 100. The indicator was developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, New Concepts in Technical Trading Systems.
In addition to identifying overbought and oversold securities, the RSI can also indicate securities that may be primed for a trend reversal or a corrective pullback in price. It can signal when to buy and sell. In addition to the direction of price, an RSI reading of 70 or above indicates an overbought condition. A reading of 30 or below indicates an oversold condition. When it is in these areas, it is time to watch more closely and perhaps, consider closing a trade.
The RSI is one of the most popular technical indicators and is available on most chart providers.
The RSI is a momentum oscillator. The relative strength index compares a security’s strength on days when prices go up to its strength on days when prices go down. Relating the result of this comparison to price action can give traders an idea of how a security may perform. The RSI, especially when used with other chart indicators, can help traders make better-informed trading decisions.


Notice the dotted line (50) in the middle. The 50 line is the neutral line between bullish (above) and bearish (below). When the line rises and swings back and forth above the 50 line, price is bullish and rising or perhaps, little swings. When it rises above the 70 line, it is overbought and likely t begin sloping back down.
When the line is below 50, price is dropping (bearish) and the closer the drop comes to the 30 line the stronger the drop. Often it will soon start to head back up or at least lessen the downward strength by rising and swinging back and forth below the 50 line.
I wish the very best for you and your trading,
Wendy
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