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Clojure for Finance by Timothy Washington

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The Relative Strength Index

Our next signal is based on the Bollinger Band, but this signal uses yet another signal called the Relative Strength Index (RSI) divergence. RSI is a technical momentum indicator that indicates the strength or weakness of a stock based on recent trading. It compares the size of recent gains to recent losses in order to determine whether an asset is overbought or oversold. An RSI divergence signal can appear before the momentum or trend of stock changes. This provides a valuable early warning mechanism and/or a confirming signal to associated trend changes. In this analysis, we'll take a look at a few things:

  • Does the price make a higher high from previous price points?
  • Does RSI divergence make a lower high?
  • Does divergence ...

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