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Relative Strength Index - RSI
Relative Strength Index is a momentum index created to help investors determine oversold and overbought conditions of particular equities.RSI measures magnitude of gains against the magnitude of losses for some determined period.
Relative Strength Index is calculated by following equation: 100 - 100 / (1 + RS), where RS =average daily upward movement / average daily downward movement for the period index is calculated.
Relative strength index can vary from 0 to 100. An asset with RSI below 30 is considered oversold and, therefore, undervalued, and asset with RSI above 70 is considered to be overbought and, therefore, overvalued.
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