Relative strenght indices
RSI: Stoxx 600
RSI: S&P 500
RSI: Nasdaq 100
Insights
CONCEPT
The Relative Strength Index (RSI) is a technical indicator used to assess the magnitude of recent price changes. It helps investors to identify overbought or oversold conditions to plan their next move.
CURRENT READINGS
- RSI current levels: Stoxx 600 is at neutral level (45.5), while the S&P 500 is at neutral level (71.6) and the Nasdaq 100 is at neutral level (79.5).
MARKET IMPLICATIONS
RSI oscillates between 0 and 100 with anything between 30 and 70 considered neutral, while we apply here stricter limits instead (20 and 80) to identify extreme non-standard market sentiment. Different investors use the RSI output in different ways.
The classic interpretation is contrarian, meaning that overbought or oversold assets may be primed for a trend reversal: if overbought (above 70/80), excessive euphoria would invite to sell; if oversold (30/20), excessive pessimism would invite to buy, while neutral readings suggest fair sentiment with no peculiar tactical signals. Momentum investors instead would use any rising trend above 50 to participate into the upside, and viceversa any downward trend below 50 to avoid the downside.