Lesson RSI (this is for daily charts)
RSI is Relative Strength Index and can be summed up this way The centerline for RSI is 50. Readings above and below can give the indicator a bullish or bearish tilt. On the whole, a reading above 50 indicates that average gains are higher than average losses and a reading below 50 indicates that losses are winning the battle. Some traders look for a move above 50 to confirm bullish signals or a move below 50 to confirm bearish signals.
Some things I look for...when a stock goes below 30 RSI ( check for dilution or the company selling shares to cover any debt problems) IF we go below 30 I start to really look at the stock as a buying opportunity, because usually the stock does not stay in the sub 30 RSI very long. When it starts to trend up if it breaks 50 then thats a bullish uptrend on rsi, when we hit 70 I get a little cautious and probably have sold shares to cover my principle investment and hold free shares. IF we hit 90 I AM ALL OUT. WAY OVERBOUGHT.
You can see here on CYOS chart that when the RSI go near 30 it bounced up and continued through 50 and into the 70 range. Then sold off and repeated the pattern
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