Question

What is Relative Strength Index? Calculate the smoothed 14-day RSI for Day 17 using the information below. Day Price Day Price 1 369.64 10 327.88 2 353.38 11 332.14 3 349.44 12 321.78 4 337.21 13 323.25 5 339.2 14 301.46 6 337.26 15 293.66 7 338.2 16 314.34 8 341.9 17 326.84 9 330.96

Answer 1

Relative Strength Index (RSI) is a technical indicator and used heavily to study the performance of the stock prices. The stock prices do change upward or downward. RSI is a measure of the momentum of change of stock prices in up or down stage both. RSI thus calculates the momentum i.e. the rate of change (rise or fall) of stock price.

It's given by the formula:

Please see the table below:

Day	Price	Daily Gain / Loss	Gain	Loss
1	369.64
2	353.38	-4.40%		-4.40%
3	349.44	-1.11%		-1.11%
4	337.21	-3.50%		-3.50%
5	339.2	0.59%	0.59%
6	337.26	-0.57%		-0.57%
7	338.2	0.28%	0.28%
8	341.9	1.09%	1.09%
9	330.96	-3.20%		-3.20%
10	327.88	-0.93%		-0.93%
11	332.14	1.30%	1.30%
12	321.78	-3.12%		-3.12%
13	323.25	0.46%	0.46%
14	301.46	-6.74%		-6.74%
15	293.66	-2.59%		-2.59%
16	314.34	7.04%	7.04%
17	326.84	3.98%	3.98%
	Average		2.11%	-2.91%

Hence, RSI = 100 - (100 / (1 + 2.11% / 2.91%)) = 42.00