KFin Technologies among 6 stocks that signal overbought state on RSI

, ETMarkets.com|

28 Aug 2023, 05:22 PM IST

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Overbought State

RSI or Relative Strength Index can be used to identify stocks that are overbought, meaning trading at a price higher than its fair or intrinsic value. ETMarkets collated a list of 4 stocks that are signalling an overbought state using the RSI metric. (Source: StockEdge)

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What is RSI?

Momentum indicator RSI gives short-term buy and sell signals and helps determine a stock’s overbought or oversold state. It is the ratio of the recent upward price movement to the absolute price movement. The value of RSI ranges between 0-100. The data computes the value of RSI by taking 14 days as a reference period.

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Formula for Computing RSI

RSI=100-100/(1+RS)
Herein, RS is the ratio of average upward movement to downward movement over a given time period.
So, here are stocks whose RSIs have crossed the 70 mark, suggesting an overbought state. Note, the data is from the previous day i.e. August 25. (Source: StockEdge)

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