Overview: Among momentum oscillators, the relative strength index (RSI) is the least complex and easiest to interpret. It sets up an index value between zero and 100 and defines overbought and oversold momentum. Because this is an effective indicator, stocks tend not to remain in these extremes for long, providing an excellent system for timing of reversal and for confirmation of other reversal signals. RSI is useful as a confirming indicator for trend reversal spotted in price; it may also serve as a leading indicator in cases where momentum precedes price reaction. However, RSI may also yield false signals, so it requires confirmation before entering new trades.
An oscillator ...
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