2/19/24, 10:15 PM What is RSI?

- Relative Strength Index - Fidelity

Log In

Save Share Print

Learn

Learn
Relative Strength Index
Favorites
(RSI)
Topics

Description
Events

The Relative Strength Index (RSI), developed by J. Welles Wilder, is a

momentum oscillator that measures the speed and change of price movements.
Search The RSI oscillates between zero and 100. Traditionally the RSI is considered
overbought when above 70 and oversold when below 30. Signals can be
generated by looking for divergences and failure swings. RSI can also be used to
identify the general trend.

https://www.fidelity.com/learning-center/trading-investing/technical-analysis/technical-indicator-guide/RSI#:~:text=Description,oscillates between zero … 1/4

2/19/24, 10:15 PM What is RSI? - Relative Strength Index - Fidelity

RSI is considered overbought when above 70 and oversold when below 30.
Log In
These traditional levels can also be adjusted if necessary to better fit the security.
For example, if a security is repeatedly reaching the overbought level of 70 you
may want to adjust this level to 80.
Note: During strong trends, the RSI may remain in overbought or oversold for
Learn extended periods.

RSI also often forms chart patterns that may not show on the underlying price
chart, such as double tops and bottoms and trend lines. Also, look for support or
Learn
resistance on the RSI.

In an uptrend or bull market, the RSI tends to remain in the 40 to 90 range

Favorites with the 40-50 zone acting as support. During a downtrend or bear market the
RSI tends to stay between the 10 to 60 range with the 50-60 zone acting as
resistance. These ranges will vary depending on the RSI settings and the strength
of the security’s or market’s underlying trend.

If underlying prices make a new high or low that isn't confirmed by the RSI,
this divergence can signal a price reversal. If the RSI makes a lower high and then
follows with a downside move below a previous low, a Top Swing Failure has
occurred. If the RSI makes a higher low and then follows with an upside move
above a previous high, a Bottom Swing Failure has occurred.

The RSI is a fairly simple formula, but is difficult to explain without pages of
examples. Refer to Wilder's book for additional calculation information. The
basic formula is:

https://www.fidelity.com/learning-center/trading-investing/technical-analysis/technical-indicator-guide/RSI#:~:text=Description,oscillates between zero … 2/4

2/19/24, 10:15 PM What is RSI? - Relative Strength Index - Fidelity

RSI = 100 – [100 / ( 1 + (Average of Upward Price Change / Average of

Log In
Downward Price Change ) ) ]

Learn Subscribe to Fidelity Viewpoints®

Timely news and insights from our pros on markets, investing, and personal
finance.
Learn
All fields are required.
First name Last name

Favorites

Email address

Subscribe

Using technical analysis

Technical analysis focuses on market action — specifically, volume and price. Technical analysis is only one
approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach
that you're most comfortable with. As with all your investments, you must make your own determination as
to whether an investment in any particular security or securities is right for you based on your investment
objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.

678853.3.0

https://www.fidelity.com/learning-center/trading-investing/technical-analysis/technical-indicator-guide/RSI#:~:text=Description,oscillates between zero … 3/4

2/19/24, 10:15 PM What is RSI? - Relative Strength Index - Fidelity

Log In Stay Connected

Locate an Investor Center by ZIP Code

Careers News Releases About Fidelity Search

International
Copyright 1998-2024 FMR LLC. All Rights
Learn Reserved.
Terms of Use Privacy Security Site Map
Accessibility Contact Us Share Your Screen
Learn Disclosures
This is for persons in the US only.

Favorites

https://www.fidelity.com/learning-center/trading-investing/technical-analysis/technical-indicator-guide/RSI#:~:text=Description,oscillates between zero … 4/4