Cutler's RSI, which is another kind of Welles Wilder's original Relative Strength Index, turns out to be a momentum oscillator used to find and demonstrate overbought and oversold conditions. It does so by keying on special levels that are usually 30 and 70 on a "0 to 100-chart."
It can show the following information:
- Movement can be not at once clear on the bar chart
- Failure swings over 70 or under 30 which show reversals
- Support and resistance
Discrepancies between price Cutler's RSI and RSI are measured like that: RSI = 100 - (100 / (1 + RS) )
RS = UPAV:x / DNAV:x, and . . .
UPAV:x = (E, period's Closes UP) / period
DNAV:x = (z: period's Closes DOWN) / period
A Close UP (or DOWN) = CLOSE - CLOSE previous
If the difference is positive, it is a Close UP. If the difference is negative, the sign is changed and it is a Close DOWN.