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R
Glossary · PSX term

Relative Strength Index (RSI).

RSI is a momentum indicator that gauges whether a stock may be overbought or oversold.

Definition

Scored from 0 to 100, readings above 70 are often seen as overbought and below 30 as oversold, though these are signals, not certainties. Traders use RSI alongside other tools, not in isolation.

Worked example

An RSI of 75 on a stock after a sharp rally may suggest it is overbought in the short term.

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