Relative Strength Index (RSI)

Subject – Economy

Context – Market falls steepest in 7 months

Concept –

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.
The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100.
- An asset is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.

Put Call Ratio

Put/Call ratio (PCR) is a popular derivative indicator, specifically designed to help traders gauge the overall sentiment (mood) of the market.
A “put” or put option is a right to sell an asset at a predetermined price.
A “call” or call option is a right to buy an asset at a predetermined price.
If traders are buying more puts than calls, it signals a rise in bearish sentiment. If they are buying more calls than puts, it suggests that they see a bull market ahead.