## Relative Strength Index - Investment & Finance Definition

A technical analysis procedure, created by J. Welles Wilder, Jr. and presented in 1978 in “New Concepts in Technical Trading Systems,” that solves the problem of trying to construct a momentum line when there are erratic price movements. The formula averages the days’ up and down closes and helps to smooth out the price movements. The resulting numbers are plotted on a vertical scale of 0 to 100. An RSI rating above 70 is called overbought, while an oversold condition occurs under 30.