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TA Challenge: How does RSI tell whether a stock is overbought or oversold?
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Meta Moo joined discussion · Apr 30, 2022 03:59

Part One: Seek to buy the dip with the RSI indicator

USD 20 Stock Cash Coupon Giveaways
Post your learning results by taping the discussion: How does RSI tell whether your stock is potentially overbought or oversold?
Hi, mooers!
The 3rd TA challenge is live!  In this new session, we're going to learn how to use the relative strength index(RSI) to try to spot the dip of a stock. Say no more. Fasten your seat belt. Let's hit the road!
RSI Definition
RSI Definition
Usage of RSI
We can use it to determine potential tops and bottoms of the trend depending on whether the security is overbought or oversold. Below is a daily chart of a specific stock.
Usage of RSI
Usage of RSI
This stock dropped in the middle of January when the RSI rose above 70, signaling that the stock was overbought and the possibility of a price decrease was high. After that, the RSI dropped below 30 in the same month, suggesting that there might be fewer sellers left in the market and that the move could be over. Price then reversed and headed back up.
Tips: If you bought an overbought stock, you could combine the RSI with the dollar-cost averaging(DCA) to help reduce risks and better manage your positions.
RSI is easy to use, right? Do you want to have a try? Let's see whether your stock might be overbought or oversold. Don't let the market take away your profits.
You can find the default RSI indicator on the "Quotes" page of a specific stock.
Part One: Seek to buy the dip with the RSI indicator
USD 20 Stock Cash Coupon Giveaways
Post your learning results by taping the discussion: How does RSI tell whether your stock is overbought or oversold?

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Meta Moo
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