INVESTMENT WORLD: Relative strength index.

from BUSINESS LINE, July 05, 2009 The Relative Strength Index (RSI) oscillator determines the strength in the prevailing trend by comparing the magnitude of a stock's recent gains to the magnitude of the recent losses. The graph below shows the RSI plotted below the price chart. The RSI oscillates between the values of 0 and 100. Between 0 and 30 is the 'oversold' zone. When the RSI declines to this zone, it means that the selling might have been overdone and an upward reversal could be around the corner. However, the RSI can stay in the oversold region for prolonged duration. There is no hard and fast rule on the duration for which RSI should feature in the oversold or overbought …