Relative strength Index is a trend reversal indicator. It is used with other indicators to get the confirmation. RSI is calculated as follows: 100 – 100/ (1+RS). Where RS is the average gain of n period minus the average loss of n period.
RSI provides buy/sell signals when a stock reaches an overbought / oversold condition. It oscillates between 0-100. If RSI is around the range of 70 or above it indicates that a security is overbought or overvalued and may be primed for a trend reversal thus an indication to sell the security. Whereas if RSI ranges around 30 or below it indicates an oversold or undervalued condition.