Relative strength index (RSI)

PrepNuggets

Oscillator that is based on the ratio of total price increases to total price decreases over N prior periods, scaled to oscillate between 0 and 100.

A high score greater than 70 indicates overbought conditions, a sell signal, while a score less than 30 indicates oversold conditions, a buy signal.  This is a contrarian strategy, that is to buy when the market is oversold, and sell when the market is overbought.

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