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Stochastic Relative Strength Index (STOCH RSI)

The Stochastic Relative Strength Index is an oscillator indicator used to determine if a stock or an asset is overbought or oversold, similar to how the Relative Strength Index indicator is used. It is calculated by taking the Relative Strength Index lows and dividing them by the Relative Strength Index highs giving you the Stochastic Relative Strength Index calculation.

When the STOCH RSI lines cross above 80, the price is considered overbought, indicating a possible reversal. The same goes for when the STOCH RSI lines cross below 20, the price is considered oversold, again indicating a possible reversal.

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Stochastic Relative Strength Index Formula

StochRSI = (RSI - Lowest Low RSI) / (Highest High RSI - Lowest Low RSI)

Formula Source: StockCharts

For more information (also the source) visit: StockCharts