Relative Strength Index (RSI)

The relative strength index is a momentum indicator.

The RSI aims is to measure the magnitude of price changes and identify overbought or oversold conditions in an asset.

Its reading varies from 0 to 100. Values smaller than 30 are considered oversold, while those higher than 70 overbought.

Divergence between the Relative strength index and price action can be very helpful in determining reversal areas.