meaning of technical expressions, page-6

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    RSI was first introduced by Welles Wilder back in the 1970s
    Essentially it shows the " strength" of the price action of a stock

    if it is very strong,( above 70 ) it is said to be overbought & due for a downward correction & the opposite applies if it is very weak.(below 30 )

    Any good charting program has RSI as a standard feature & most of the charting stuff on the net also allows you to plot the rsi.
    I can give you the formula to plot it if you really want it but you have to keep running figures all the time ( for a 14 day rsi the previous 14 days figures or X days for an X day rsi ).... No need as it is so readily available

    Like all the technical indicies , moving averages, etc. they are just different ways of representing the PAST prices of the stock to somehow show something about the present price, & where it may go in the future.

    They are useful but don't be too reliant on them.

    As I said in my previous post if a stock is in a very strong uptrend/downtrend, the RSI ( & other ocillators ) will show the stock to be ovebought/oversold,& despite this the prevailing trend continues.
    My suggestion is you buy an introductory book on T/A & become familiar with what the indicators do & represent.
    There is a bit more to it than that, but this is a start.
    Finally, once you understand them all , forget most of it & concentrate on a couple of indicators which work for you
    Moving averages & straight lines ( support & resistance & trend lines) & one maybe 2 ocillators RSI & MACD are all you need.

    Hope this is helpful

    Cheers
    Bendigo




 
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