The Relative Strength Index is a momentum indicator that looks at the size of recent gains compared to recent losses. From this data it tries to determine overbought and oversold conditions.
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The Relative Strength Index is measured on a scale of 1-100. Generally a value under 30 is considered oversold and over 70 overbought.
Often using the Relative Strength Index on its own is unreliable for signals, it is often used in conjunction with other indicators and chart patterns.
The formula for the Relative Strength Index is:
100 -(100 / (1+S))
S = Average of X number of bullish closes / Average of X number of Bearish Closes
X = Period of RSI
