The relative strength index (RSI) refers to a momentum indicator that is used in technical analysis. RSI calculates the rate and magnitude of a security’s current price fluctuations to assess overrated or undervalued conditions in the security’s price.
The RSI is shown as an oscillator on a scale of 0 to 100. Besides pointing to overbought and oversold securities, the RSI can do much more.
It can also suggest securities that can be primed for a direction reversal or corrective pullback in the price. It can hint when is the right time to buy and sell. Traditionally, an RSI reading of 70