Relative Strength Index (RSI)
One of the most widely used indicators by short-term traders is the Relative Strength Index (RSI). This compares the number of days that an index finishes higher against the number that it ends lower. It ranges in value from 0 to 100 and is generally considered to be showing overbought conditions if it reaches 70 or more and oversold if it approaches 30, although some traders prefer to use 80 and 20 respectively. It doesn’t compare the relative strength of different securities as the name suggests, but it only shows the performance of just one security.