Finance glossary
Relative Strength Index (RSI)
Definition
A momentum indicator measuring whether an asset is overbought or oversold.
RSI oscillates between 0 and 100 based on the speed and magnitude of recent price changes. Readings above 70 suggest an asset may be overbought, while below 30 suggests oversold. Traders use it to spot potential reversals, though strong trends can keep RSI extreme for long periods.
In a sentence
With the Relative Strength Index (RSI) above 70, the stock looked overbought and due for a pullback.
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