StochRSI Indicator

The stochastic RSI (StochRSI) is an indicator used to compare the price to its price range to predict price turning points, and momentum for overbought and oversold positions.

An oversold condition is indicated by the StochRSI value that is below 0.2. It means that trading is at the lower range, and a downward momentum may soon be exhausted for the impending upward turn to occur.

Conversely, a value of more than 0.8 implies an overbought market condition. The indication is that an impending downward turn may soon occur after an upward momentum is exhausted.

When using the Stoch RSI, overbought and oversold work best when trading along with the underlying trend. During an uptrend, look for oversold conditions for points of entry. During a downtrend, look for overbought conditions for points of entry.