Indicators: Stochastic RSI
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Stochastic RSI:
In their 1994 book, "The New Technical Trader", Tushar S. Chande and Stanley Kroll explain that RSI can oscillate between 80 and 20 for extended periods without reaching extreme levels. Notice that 80 and 20 are used for overbought and oversold instead of the more traditional 70 and 30. Traders looking to enter a stock based on an overbought or oversold reading in RSI might find themselves continuously on the sidelines. Chande and Kroll developed Stochastic RSI to increase sensitivity and generate more overbought/oversold signals.
This version deviates from their description in the fact that it uses a sort of a signal line to make it even more sensitive.
Author: Mladen Rakic