Relative Strength Index (RSI)

Developed by Welles Wilder, RSI is one of the most popular oscillators used by traders to measure the oversold or overbought nature of a security. Values will range from 0 to100 depending upon how much up movement occurs relative to down movement. An indicator reading approaching 0 denotes an oversold condition while a reading approaching 100 denotes an overbought condition in the shares. Traditionally, values under 20 and over 80 mark the starting points for the zones where oversold and overbought conditions begin to be felt. When stocks approach these zones you should heighten your awareness and look towards a possible reversal in the stock's trend.