The Relative Strength Index, or RSI, is a valuable tool for predicting market trends and identifying potential turning points. It is based on the observation that a stock's closing price tends to be closer to its daily high when it is gaining, and closer to its low when it is declining. This indicator is also useful for comparing the strength of two different equities. RSI's values range from 0 to 100, with buy signals triggered at 30 and sell signals at 70. Another important aspect of RSI is identifying divergence between price and the indicator, where an upward-sloping price and a downward-sloping RSI may indicate a potential warning. Understanding and utilizing RSI can greatly benefit investors in navigating the ever-changing market.
