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Concept: Definedge
RSI Period : 14
Average Period : 9
Ratio RSI is an extremely creative indicator. The RSI indicator was created by J. Welles Wilder and is a popular momentum indicator.
The ratio chart is a component of the relative strength analysis in a market analysis.
Ratio charts are produced by dividing the price of the numerator instrument by the price of the denominator instrument. Therefore, you must choose the denominator instrument when plotting the Ratio RSI chart indicator below the price. The default instrument is Nifty.
The Ratio RSI indicator plots the RSI on the instrument’s ratio chart. The Ratio RSI shows the RSI reading of the security on the ratio chart of the security against Nifty, if the denominator is Nifty.
The rising RSI indicator indicates that the stock is outperforming the denominator as well as exhibiting strong momentum.
The Ratio RSI line crosses above the Average line when it is bullish, and crosses below the Average line when it is bearish.
Prashant Shah introduced this pattern in his book on Relative Strength analysis.
Click here to learn more about the indicator and the relative strength analysis.