InvestorQ : What is the Relative strength Index (RSI) used for in technical analysis? Is it a useful technical indicator?
Arti Chavan made post

What is the Relative strength Index (RSI) used for in technical analysis? Is it a useful technical indicator?

Answer
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1 year ago


Relative Strength Index (RSI) is another of those popular Momentum Oscillators that is extensively used by chartists and also by short term and medium term traders in the market. The Relative Strength Index (RSI) is another momentum oscillator that measures the speed and change of price movements. The RSI is most popular to identify the overbought and the oversold zones in the price time series. The RSI oscillates between zero and 100 but that is on an extreme outlier basis only. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. Signals can be generated by looking for divergences and failure swings. RSI of the overall index like the Nifty or the Sensex is also very useful as it can also be used to identify the general trend.