RSI – Relative Strength Index

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RSI-chart-BPI-sample-1024x448 RSI - Relative Strength Index Silog Playbook

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. – investopedia.com

Sinusubukan ng RSI na ipakita kung ang stock ay masyado nang marami na ang bumili (overbought) o marami na ang nagbenta (oversold).

Quick recap ng law of supply and demand, Mas marami ang supply o nagbebenta (overbought), bumababa ang presyo. Mas marami ang demand o bumibili (overbought), tumataas naman ang presyo.

Sa pag aaral ng rsi, tinitingnan natin kung ang isang stock ay overbought na. Dahil overbought na ito, malaki ang chance nito na ang mga nakabili ay magbebenta para mag profit taking. At pag dumami ang may gustong mag profit taking, dadating tayo sa panahon na oversold naman ang stock at gusto ng mga nakabili na bumili ulit.

How to use:

Rsi graph is moving on a range of 0 to 100. Masasabi nating overbought na ito kapag umabot na ito sa 70. At oversold naman sa 30. Madalas gamitin ang RSI hindi para alamin kung kailan ka bibili o magbebenta, kundi isang supplement lamang sa ibang indicator katulad ng MACD.

RSI-chart-Nikl-sample-1024x385 RSI - Relative Strength Index Silog Playbook
NIKL Chart showing RSI indicator

Divergence

A situation that occurs when stock trend move in opposite direction relative to its indicator.

Nangyayari ang divergence kapag ang trend ng stock ay kabaliktaran ng RSI trend. At pag nangyari ito, malaki ang chance na magkaroon ng malaking pagbabago sa stock trend.

  • Bearish divergence – the stock registers a downtrend while RSI is showing an uptrend. This combination often results to an uptrend
  • Bullish divergence – the stock registers an uptrend while RSI shows downtrend. This often results to a downtrend.
Divergence-sample RSI - Relative Strength Index Silog Playbook
Sample RSI divergence c/o stockcharts.com

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