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RSI, the relative strength index

How the 14-day RSI is used in the momentum score.

The relative strength index compares the size of recent up days with recent down days and squeezes the result into a range from 0 to 100. A common setting is 14 days.

Readings above 70 are often called overbought and below 30 oversold, but strong trends can stay overbought for weeks. That is why Pulse does not treat RSI as a simple reversal signal.

In the momentum ingredient, an RSI between 50 and 70 earns the full 20 points because it shows buyers in control without extreme stretch. Above 70 earns less, above 80 less still, and readings below 40 earn very little. Momentum is worth up to 20 points.

Frequently asked questions

Does a high RSI mean the price will fall?

Not by itself. In strong trends RSI can stay above 70 for a long time. Pulse treats it as stretch, which lowers the momentum points but does not flip the score on its own.

What RSI period does Pulse use?

14 daily candles, the most common setting.

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