RSI

The Relative Strength Index (RSI) is a momentum oscillator used to measure the speed and change of price movements. It ranges from 0 to 100 and indicates overbought or oversold conditions. In oil trading, an RSI above 70 suggests crude may be overbought, while below 30 indicates overselling.

RSI helps traders identify potential reversals, confirm trends, and develop entry or exit strategies. For example, if Brent crude shows an RSI above 75 and starts declining, traders might anticipate a short-term pullback and adjust positions accordingly.

Traders often combine RSI with other indicators like moving averages or pivot points to improve accuracy. Its effectiveness depends on timeframe selection and market conditions.

RSI provides insight into market sentiment, helping participants balance technical analysis with fundamental considerations. Proper interpretation can enhance risk management, profit potential, and portfolio strategy in oil and broader financial markets.