Relative Strength Index
Relative Strength Index – RSI: Is a technical indicator used to measure the strength or weakness of a stock to determine if it is overbought or oversold.
Measuring a stock movement by using RSI, helps an investor determine a stock’s gain or losses over a set period, and gives an indication of when to buy or sell that stock.
RSI is often referred to as a “momentum oscillator” since it measures a stock’s price movements.
RSI oscillates between zero and 100, and is considered overbought when above 70 and oversold when below 30.
Moving Average: is a technical indicator that refers to an average price for a particular trading instrument over a specified period.
Moving averages are used by investors and traders to track and identify trends by smoothing normal day-to-day price fluctuations.
Bollinger Bands: a method for traders to identify extreme short-term prices in a security. The indicator is created by plotting the average of a predetermined number of prices, along with two trading bands.
The outer bands are created by simply adding and subtracting one standard deviation from the moving average. Standard deviation is used to create this indicator because it is a common measure of volatility.