General Statement(2)

General Statement(2) - General Statement The Relative...

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General Statement The Relative Strength Index ( RSI ) is a technical indicator used in the technical analysis of financial markets . It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with relative strength . The RSI is classified as a momentum oscillator , measuring the velocity and magnitude of directional price movements. Momentum is the rate of the rise or fall in price. The RSI computes momentum as the ratio of higher closes to lower closes: stocks which have had more or stronger positive changes have a higher RSI than stocks which have had more or stronger negative changes. Calculation For each trading period an upward change U or downward change D is calculated. Up periods are characterized by the close being higher than the previous close: U = close now − close previous D = 0 Conversely, a down period is characterized by the close being lower than the previous
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This note was uploaded on 05/02/2011 for the course FINANCE 9924603 taught by Professor Ssgdbfb during the Spring '11 term at Kyung Hee.

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General Statement(2) - General Statement The Relative...

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