Relative Strength Index (RSI)

The Relative Strength Index (RSI) measures momentum. It captures the speed and change of price movements. RSI oscillates between the ranges 0 to 100. When the oscillator is below 30, the stock is considered oversold. When the oscillator is above 70, the stock is considered overbought.

 

Ways to Interpret the Relative Strength Index (RSI) Oscillator

Interpretation of the Relative Strength Index (RSI)
Buy When the oscillator is below 30.
Buy When the oscillator crosses the 30 line upwards.
Sell When the oscillator is above 70.
Sell When the oscillator crosses the 70 line downwards.

 

Look for the Following Divergences

Divergences
Identify a Bottom Forming When the price of the stock goes lower but the Stochastic Oscillator goes higher.
Identify a Top Forming When the price of the stock goes higher but the Stochastic Oscillator goes lower.

 

Example 1

RSI Oscillator 1
Source: Thinkorswim by TDAmeritrade

 

Example 2

RSI Oscillator 2
Source: Thinkorswim by TDAmeritrade

 

Example 3

RSI Oscillator 3
Source: Thinkorswim by TDAmeritrade

 

Example 4

RSI Oscillator 4
Source: Thinkorswim by TDAmeritrade

 

My Financial Analysis of Stocks

  • Swapped Disney (DIS) for more ViacomCBS (VIAC) A couple of months ago, we sold our shares in Disney (DIS) in exchange for ViacomCBS (VIAC). Unfortunately for us, we had to take our meager profits in Disney and ...
    Posted Jan 17, 2022, 11:36 AM by Intelligent Investor
  • Archive: My Stock Holdings 2020 View My Analysis: My Stock Holdings 2020
    Posted Jan 23, 2022, 6:55 PM by Intelligent Investor
  • Archive: My Stock Research 2020 View My Analysis: My Stock Research 2020
    Posted Jan 23, 2022, 6:56 PM by Intelligent Investor
  • Buying the Dip in ViacomCBS (VIAC) and Sold Pfizer (PFE) A very big opportunity came today to buy ViacomCBS (VIAC) at a ridiculously low price. Unfortunately we had to sell Pfizer (PFE). Pfizer has been a big disappointment for us ...
    Posted Mar 29, 2021, 12:09 AM by Intelligent Investor
  • Accumulating ViacomCBS (VIAC) We believe there is a greater opportunity in ViacomCBS (VIAC). We have been accumulating the stock for the past year. Our analysis is a mere common sense. During the course ...
    Posted Jan 25, 2021, 5:25 PM by Intelligent Investor
  • Sold AXP, BRK.B, JPM, and WFC We sold all of our shares in American Express (AXP), Berkshire Hathaway Class B (BRK.B), J.P. Morgan (JPM), and Wells Fargo (WFC).American Express (AXP) - We just do ...
    Posted Jan 19, 2021, 7:53 PM by Intelligent Investor
  • We Have Bottomed, Next Stop Dow Jones 100,000 The bottom of this recession was on March 23, 2020, when the Dow Jone hit 18,214. This recession was short-lived, it only lasted about 3 months. Our Gross ...
    Posted Jun 8, 2020, 12:32 PM by Intelligent Investor
  • Archive: My Stock Research 2019 View My Analysis: My Stock Research 2019
    Posted May 21, 2020, 9:21 PM by Intelligent Investor
  • Archive: My Stock Holdings 2019 View My Analysis: My Stock Holdings 2019
    Posted May 21, 2020, 9:21 PM by Intelligent Investor
  • Another Dead Cat Bounce, We Haven't Bottomed Yet, Goldman Predicts S&P 2000 The Dow Jones has rallied to 22,327 over the past several days. However, we believe this is another dead cat bounce. We sold all our shares of United Health ...
    Posted Mar 30, 2020, 8:35 PM by Intelligent Investor
Showing posts 1 - 10 of 55. View more »