Analysis · Investing Glossary
What Is Relative Strength Index (RSI)?
A 0–100 momentum gauge that compares recent gains with recent losses.
The Full Definition
The Relative Strength Index compares the size of recent up moves with recent down moves and turns the result into a number from 0 to 100. Wealth Catchers uses the standard 14-period version with Wilder's smoothing, on daily and weekly closes. Readings of 70 or above are often described as overbought, and 30 or below as oversold. Those words describe how stretched recent momentum is. They aren't instructions, and a stock can stay overbought or oversold for a long time.
Real-World Example
After ten straight up days, a stock's RSI might read 78, an overbought reading. In Entry Point Analysis, RSI is context only: it never moves a level or the Entry Range.