RELATIVE STRNGTH INDEX

:
Developed J. Welles Wilder, the Relative strength index (RSI) is a
momentum oscillator that measures the speed and change of price
movements. RSI oscillates between zero and 100. Traditionally, and
according to Wilder, RSI is considered overbought when above 70 and
oversold when below 30. This RSI calculation is based on 14 periods
Calculation of RSI:
100
RSI = 100 - --------------1 + RS
RS = Average Gain / Average loss
The very first calculations for average gain and average loss are simple 14
period averages.

First Average Gain = Sum of Gains over the past 14
periods / 14.

First Average Loss = Sum of Losses over the past 14
periods / 14

The second, and subsequent, calculations are based on the prior averages
and the current gain loss:

Average Gain = [(previous Average Gain) x 13 + current
Gain] / 14.

Average Loss = [(previous Average Loss) x 13 + current
Loss] / 14.

70 or above – stock is to be over valued
Near 70 – it may be good time to sell.
30 or below - Stock is to be undervalued. It may be a good time to
buy that stock.

3 -33 20.1 5 -111.2 0 5432.1 46.37 44.15 92.55 66.6 0 5762.3 5 6079.1 -92.38 46.3 0 5512.15 109.2 5 5904.25 -88.14 13.30 23.55 -31.55 -15.78 0.6 5 141.25 50.7 88.day RSI 14.65 143.85 55.7 14.75 12.55 31.38 27.2 0.6 0 5696.35 -97.85 -83.25 11.2 5 5687.66 0.35 111.43 11.23 0.75 -55.55 -143.80 0.30 23.27 47.2 5 5751.15 -6.0 5 5711.0 Change Gain Loss Avg Gain Avg loss RS 14.9 0 5417.67 50.31 47.8 5 5754.7 5 8.7 5 5724.8 0 6048.6 0 6146.34 25.8 14.18 16.55 43.96 -11.2 69.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Date 03-Jan-2011 04-Jan-2011 05-Jan-2011 06-Jan-2011 07-Jan-2011 10-Jan-2011 11-Jan-2011 12-Jan-2011 13-Jan-2011 14-Jan-2011 17-Jan-2011 18-Jan-2011 19-Jan-2011 20-Jan-2011 21-Jan-2011 24-Jan-2011 25-Jan-2011 27-Jan-2011 28-Jan-2011 31-Jan-2011 01-Feb-2011 02-Feb-2011 Closing price 6157.4 0 5604.25 6.26 20.9 0 5654.0 5 5691.75 15.55 33 20.60 14.25 18.S.40 0.49 19.25 -66.60 0.3 69.5 5 5654.75 109.16 0.1 5 5505.1 46.75 -8.43 15.26 20.60 11.23 47.1 0 5863.43 0.3 5 97.5 0 5743.75 -141.1 83.8 .35 0.

69 40.10 49.75 64.0 0 5481.5 17.23 17.5 INTERPRETATION: From the 14 days RSI Calculation observed that Nifty movements are continuously fluctuating.2 84.75 94.45 83.11 48.14 0.43 13.77 14.73 24.20 46.23 24 25 26 27 28 29 30 31 32 33 34 03-Feb-2011 04-Feb-2011 07-Feb-2011 08-Feb-2011 09-Feb-2011 10-Feb-2011 11-Feb-2011 14-Feb-2011 15-Feb-2011 16-Feb-2011 17-Feb-2011 18-Feb-2011 0 5526.7 0 5546.0 0 5456.75 27.92 12.37 0.01 0.7 5 5395.40 38.25 43.42 0.50 41.9 5 94.25 20.77 0.41 28.64 39.75 15.54 0.31 44.8 0 5310.39 27.98 26.33 24.30 25.55 0.12 0.25 -83.81 0.83 45.7 5 5396.60 131 87.05 26.5 5 5225.78 27.44 0.0 0 5481.34 49.75 -131 0.43 33.4 5 5458.26 20.5 5 5253.2 146 146 25 25 0. So it is the right time to buy the Nifty Stock.33 24.69 40.67 0.17 47.7 64.29 22. All the 14 days RSI is Below 70.56 35.45 -59 59 -27. .47 37.98 0.84 16.0 0 5312.75 -87.75 84.7 0.69 0.69 40.

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