V.4:9 (343-346): The Relative Strength Index by J. Welles Wilder, Jr.

V.4:9 (343-346): The Relative Strength Index by J. Welles Wilder, Jr.
Item# \V04\C09\RSI.PDF
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Product Description

The Relative Strength Index by J. Welles Wilder, Jr.

The Relative Strength Index (RSI) is a tool which can add a new dimension to chart interpretation when plotted in conjunction with a daily bar chart. Some of these interpretative factors are:

Tops and bottoms are indicated when the RSI goes above 70 or drops below 30;

Chart formations which often show up graphically on the RSI may not be apparent on the bar chart;

Failure swings above 70 or below 30 on the RSI scale are strong indications of market reversals;

Support and resistance often show up clearly on the RSI before becoming apparent on the bar chart;

Divergence between the RSI and price action on the chart is a very strong indication that a market turning point is imminent.

Before taking up the equation for calculating the Relative Strength Index, let's examine briefly the momentum concept upon which the RSI is based.

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