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Classic Technical Indicators: Advanced Interpretations of the RSI

February 17, 2018

In the third part of this series on the relative strength index (RSI) indicator, I look deeper into some intermediate-level methodologies and applications utilizing RSI. To begin, I look at some of the indicator’s strengths, weaknesses, cautions and misconceptions in an effort to gain a better overview and feel for the indicator. After the conclusion of that section and the final theory of the indicator, I then break down in detail six specific and direct applications with RSI. Included are discussions on intermediate chart interpretations for direct security analysis and some alternate methodologies of using RSI to potentially benefit investors.

For all articles in this series, please click here.

Accepted Indicator Strengths

RSI can be a very simple indicator to interpret and it does generate a number of well-defined easily identifiable signals. Because of this, it is very popular and utilized by investors of all levels or experience. Additionally, it is widely distributed and readily available free of charge on the web or within any technical investing platform.

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Recent Articles

October 21, 2017

Classic Technical Indicators: Inside the Numbers of RSI

Part two of a series on the relative strength index takes a deeper look at a number of calculation oddities that are not widely published or known to many of RSI’s most advanced users.

July 15, 2017

Classic Technical Indicators: The Basics of the RSI

The first part of a four-part series on the relative strength index covers the basics: RSI’s origin, its components, how to construct and plot it, and its traditional interpretations.

October 15, 2016

Three Reversal Patterns Every Investor Should Know

Reversal patterns are useful to traders and longer-term investors alike since they signal when the underlying trend in a security is coming to an end.

May 21, 2016

Classic Technical Indicators: Introduction to a New Series, Part 2

In the second part of our interview with CI’s new contributing editor, Raymond Rondeau explains how technical indicators and processes can be used to an investor’s advantage.