Stocks Overbought Oversold
Stocks Overbought Oversold
A Stock Market Timing Secret Revealed
How a special combination and setting of proven indicators, can alert you on significant Stock Market tops and bottoms.
RSI – Relative Strength Index is a well known and much used momentum indicator. It was invented by J. Welles Wilder Jr., a great technical analyst.
RSI compares the magnitude of a stock or index’s recent gains to the magnitude of it’s recent losses and that information is turned into a number that ranges from 0 to 100. A single parameter is used, the number of time periods for the calculation. 14 periods is recommended by Wilder.
Common practical use of RSI in stock market timing is to measure the underlying strength of the market and to determine if it’s getting overbought or oversold. Wilder’s own recommendation was to use 70 and 30 levels, to indicate an overbought and oversold market, respectively. If RSI rises above 30 it’s considered bullish for the stock or index. If the RSI falls below 70, it’s a bearish sign.
Bullish
Episode 56: Ultimate Oscillator: A Tool for Determining Overbought and Oversold Conditions
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