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Technical analysis
Also called: RSI, Relative strength index
RSI (Relative Strength Index) is a momentum indicator that scores recent price gains against recent losses on a 0–100 scale, usually over 14 periods. Readings above 70 are conventionally called overbought and below 30 oversold.
RSI = 100 − 100 ÷ (1 + RS), where RS = average gain ÷ average loss over the last 14 bars (Wilder smoothing)
Over 14 days a stock's average up-day gain was ₹6 and its average down-day loss was ₹3. RS = 2, so RSI = 100 − 100 ÷ 3 ≈ 66.7.
It is the standard way to ask whether a run has gone far enough to pause, without forming a view on the company itself.
Above seventy, buyers have been in charge and the move is stretched. Below thirty, sellers have. A strong trend can stay stretched for a long time, so this is a caution rather than a signal.
| Below 30 | Heavily sold. Often where rebounds start, and where falls continue. |
|---|---|
| 30 to 50 | Sellers have had the upper hand recently. |
| 50 to 70 | Buyers have had the upper hand recently. |
| Above 70 | Stretched. The recent run has been one-sided. |
Rough conventions for an ordinary company; sectors differ. A range is not a buy or sell level.
RSI (Relative Strength Index) is a momentum indicator that scores recent price gains against recent losses on a 0–100 scale, usually over 14 periods. Readings above 70 are conventionally called overbought and below 30 oversold.
RSI = 100 − 100 ÷ (1 + RS), where RS = average gain ÷ average loss over the last 14 bars (Wilder smoothing). Over 14 days a stock's average up-day gain was ₹6 and its average down-day loss was ₹3. RS = 2, so RSI = 100 − 100 ÷ 3 ≈ 66.7.
No. RSI describes one aspect of a company, a price or a contract, and it is best read alongside other numbers and the business itself. Jivani Markets is a research and education platform; it does not give buy, sell or hold recommendations.