Education – Lesson 17 – RSI

The RSI indicator calculates the strength of the price action compared to its prior range. So when a stock is trending up, the RSI indicator will be near the top of the range suggesting the stock is moving higher. Interesting traits about the RSI. The RSI typically stays above 40 on longer term uptrends on a weekly chart. When the stock has trouble rallying above 60after falling below 40, this is a clue that we are probably in the top of the range of a downtrend.