RSI stands for Relative Strength Indicator. It is a technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold levels.

In this blog, I will provide list of Singapore Market Stocks based on

1. 13 Period RSI > 70 for overbought level.
2. 13 Period RSI < 30 for oversold level.
3. Volume traded > 100,000 shares.

One important thing to note is I am using freely available stock price information for computing the RSI indicator. The price information is not adjusted for stock dividends and split.

Links
Free ADX Scanner
Free MACD Scanner

Tuesday, March 2, 2010

RSI Introduction

The relative strength indicator (RSI) was developed by Welles Wilder. It is a momentum indicator that measures the relative internal strength of a security against itself.

RSI is computed based on the formula

RSI = 100 – 100/(1+RS)

Where

RS = (Average of x days up close)/(Average of x days’ down close)

The default time span recommended by Wilder is 14 days. This is based on the 28 day lunar cycle.

For 14 day RSI, the oversold level is traditionally set at 30 whereas the overbought level is set at 70.

The 14 day RSI is usually adequate for short term trading.

RSI can also be performed on weekly or monthly data. This is usually done for long term trades.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)