Relative Strength Index (RSI):

How to Make Advanced Use of a

Simple Indicator

Presented by:

David Cox, CFA, CMT, FCSI, FMA, BMath

Portfolio Manager

June 18th, 2014

Market Technicians Association WEBINAR
My Beliefs
Buy & Hold DOES NOT work

Stocks/markets/assets go through bullish (rising)

periods, which are followed by bearish (falling)
periods extract profits regularly

Holding equities in a bear market/downtrend is

akin to financial suicide

ANYTHING is possible

Small losses are preferred to big losses

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 The Big Picture

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Source: Metastock
The Holy Grail

There is no such thing!

Stop looking for it!

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Open Mind

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Relative Strength Index

Welles Wilder

Momentum oscillator

Measures speed & change of price movements

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Same But Different

Technical indicators are TOOLS ->

Tools require INTERPRETATION ->

DIFFERENT interpretation is common!~

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Relative Strength Index

Measures the magnitude of recent gains vs. losses

Ranges from 0-100

< 30 is called oversold

> 70 is called overbought

TOO SIMPLE AND NOT

PRACTICAL ENOUGH!

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 TSLA: Still Overbought

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Source: Metastock
 PCLN: 30 In Context

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Source: Metastock
 RSI 5 vs. RSI 14

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Source: Metastock
 RSI 5 vs. RSI 14

12
Source: Metastock
 3D Printing

13
Source: Metastock
 Bottoms Up!

14
Source: Metastock
 Bombs Away!

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Source: Metastock
 What Do You See?

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Source: Metastock
 U.S. Bonds: Weekly

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Source: Metastock
 Gold Equities

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Source: Metastock
 Watch for Extremes

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Source: Metastock
 Buy or Sell?

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Source: Metastock
 Buy The Dips

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Source: Metastock
 Sell The Rallies

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Source: Metastock
Key Points
Extremes

Art vs. Science

Black Box vs. Intuition

Divergence

Pullbacks/Rallies

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Upcoming Seminars
How to Sell, When to Sell: Turning Paper Profits
into Real Profits
Tuesday, July 22nd Cutten Fields, Guelph, ON @ 8am
WEBINAR will be made available after the event

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Useful Stuff
Monthly Market Chit Chat monthly e-publication
that discusses the risks and opportunities facing
investors email me to subscribe

www.davidcox.ca a variety of seminars,

webinars and publications are published

Spotting Long-Term Trend Changes via

Divergence recorded by the MTA December 15,
2010
http://media.mta.org/videos/2010/educational-web-
series/david-cox/david-cox.html
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Social Media
Google/YouTube: www.google.com/+DavidCoxWG

Twitter: http://www.twitter.com/DavidCoxWG

Facebook: http://www.facebook.com/DavidCoxWG

LinkedIn: http://ca.linkedin.com/in/DavidCoxWG

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Questions & Answers

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 Thank You
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