A technical analysis indicator that compares the days that a stock finishes up against when it finishes lower. The RSI ranges from 0 to 100, but a stock is considered overbought if it reaches 70 (or 80 in true bull markets), indicating that you should consider selling the stock.
RSI (Relative Strength Index) Formula:
RSI = 100 - (100/1 + RS)
RS = ratio of exponentially smoothed moving average of n-period gains divided by the absolute value of the exponentially smoothed moving average of n-period losses.
Reference: Kaufman, Perry, The New Commodity Trading Systems and Methods