The RSI indicator
posted on
May 14, 2010 04:08PM
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I was thinking of posting a lengthy dissertation on the virtues of the RSI indicator; I have chosen not to.
I will say this much. In a "bull market" at all time frames this indicator will usually range between 40 and 80. In a "bear market" it will range from 20 to 60. Its range in a "neutral market" is 30 to 70, hence the lines are bolded at that point.
When I bought Tyhee in Nov. 08 at $0.08 per share the RSI was 34 on the monthly, 27 on the weekly and 35 on the daily. This was an historic oversold condition. I wish I could change the font size as well as bolding, italicizing, and underlining the word "historic." More emphasis is needed on how absurdly oversold Tyhee was at that point in time.
Currently the RSI monthly is 44.5, the weekly is 44.7, and the daily is 39.8.
Since there is a bull market for gold and will soon be a "bubblicious" bull market for gold miners, juniors included; is this a "buy" point or a "sell" point?
Please remember the mid point of the range we are considering is 60 and the lowest reasonably possible is usually 40. Also recognize that only rarely do all three indicators line up in such fashion.
Can the stock go lower? Of course, human stupidity knows no bounds. But unless one figures this company is going out of business, this is a very, very good buy point!
P.