What is rsi indecator?

The Relative Strength Index (RSI) is a technical analysis indicator used to measure the speed and magnitude of recent price changes to identify overbought or oversold conditions in a security's price. It oscillates between zero and 100 and is interpreted as follows: 1. **Overbought and Oversold Conditions**: An RSI above 70 is considered overbought, indicating that the asset may be overvalued and due for a price correction. Conversely, an RSI below 30 is considered oversold, suggesting that the asset may be undervalued and due for a price rebound. 2. **Momentum Indication**: The RSI can also indicate the strength of price momentum. A high RSI suggests strong buying pressure, while a low RSI suggests weak buying pressure. 3. **Divergence**: The RSI can be used to identify potential trend reversals by looking for divergences between the indicator and the price action. A bullish divergence occurs when the asset forms a lower low in price but the RSI forms a higher low, indicating a potential upward price movement. Conversely, a bearish divergence occurs when the asset forms a higher high in price but the RSI forms a lower high, indicating a potential downward price movement. In summary, the RSI is a valuable tool for traders and investors to gauge the momentum and potential overbought or oversold conditions in a security's price, helping to inform trading strategies and potential entry and exit points.