RSI

Tracking the Relative Strength Index (RSI) of a company can offer investors several valuable insights:

• Overbought/Oversold Conditions: RSI helps investors identify overbought or oversold conditions. An RSI above 70 suggests a stock may be overbought and due for a correction, while an RSI below 30 indicates it may be oversold and poised for a rebound.
• Trend Strength: RSI measures the strength of a stock's recent price movements. A high RSI indicates strong upward momentum, while a low RSI signals strong downward momentum.
• Divergence Analysis: RSI divergence, where the stock price and RSI move in opposite directions, can signal potential trend reversals. Bullish divergence occurs when prices fall but RSI rises, and bearish divergence occurs when prices rise but RSI falls.
• Entry and Exit Points: Investors use RSI to determine optimal entry and exit points. Buying when RSI is low and selling when it is high can improve trading performance and maximise returns.
• Market Sentiment: RSI reflects market sentiment and investor behaviour. Extreme RSI values can indicate market emotions, such as fear or greed, providing insights into potential market turning points.
• Complementary Analysis: RSI can be used alongside other technical indicators to confirm signals and enhance the accuracy of trading decisions. It provides a more nuanced view of price movements and market conditions.

Overall, RSI metrics can complement other financial data, offering a more comprehensive view of a company’s stock performance, market trends, and potential investment opportunities.