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A momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100.
RSI compares the magnitude of recent gains to recent losses to determine overbought or oversold conditions. Readings above 70 suggest overbought conditions (potential pullback), while readings below 30 suggest oversold conditions (potential bounce). The standard period is 14 days. RSI divergence occurs when price makes a new high but RSI does not, which can signal a potential reversal. While useful, RSI works best as a confirmation tool alongside other indicators rather than as a standalone signal.