Relative Strength Index

The Relative Strength Index (RSI) is a momentum indicator illustrating where the current price is in relation to the past prices for the observed period. It is an oscillator ranging between 0 and 100. It is calculated on the basis of the average gain the up periods and the average loss in the down periods over the set number of periods. RSI values below 30 are considered to indicate that the market is oversold (a bullish signal) and the values above 70 are indicating that the market is overbought (a bearish signal). A divergence between RSI and price may also indicate that the current trend is likely to reverse.

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