Relative Strength Index (RSI)

RSI is a momentum oscillator that measures how quickly prices are rising or falling over a recent period, usually 14 days. It tells you whether a stock is overbought or oversold. A value above 70 generally suggests overbought conditions, while below 30 signals oversold.

You can use RSI to spot potential reversal zones. For example, if a stock’s RSI crosses below 30 and then turns upward, it might be a good time to consider buying. Similarly, if RSI goes above 70 and starts dipping, it could signal a potential exit or short opportunity.

A stock like HDFC Bank drops sharply, and its RSI dips to 28. This could mean it is oversold, and a bounce might be expected. If the RSI starts climbing above 30 again, traders might look at entering with a tight stop-loss.

Parameter	Description	Default Value
Window	Number of periods for the indicator	14