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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceOver the last 14 sessions a Bursa-listed share's average gain was RM0.30 and its average loss RM0.10. Using Wilder's formula, what is its Relative Strength Index?
Wilder's RSI = 100 − 100 ÷ (1 + RS), where RS = average gain ÷ average loss = 0.30 ÷ 0.10 = 3. RSI = 100 − 100 ÷ 4 = 75.0, above the conventional 70 overbought line. 25.0 is 100 ÷ (1 + RS), the second term on its own. 66.7 is 100 − 100 ÷ RS, which drops the 1 from the denominator. 300.0 reports RS as a percentage instead of converting it to the 0–100 oscillator. Source: SIDC Module 7 Study Outline (Jul-Dec 2026) Topic 6 Technical Analysis, 6.6 Indicators; J. W. Wilder, New Concepts in Technical Trading Systems (1978) (as at October 2026).
Stopping at RS. RS is a ratio that can exceed 1; the RSI formula squeezes it into a 0 to 100 scale.
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