What Do Big Moves in StochRSI Tell Us?


StochRSI, or Stochastic RSI, is the Fast Stochastic Oscillator applied to RSI. This makes it a momentum oscillator of a momentum oscillator. Velocity is a term that could be used to describe the momentum of momentum. The chart below shows Carmax (KMX) with RSI(14) in the first indicator window. RSI(14) and the Full Stochastic Oscillator (14,1,1) are in the middle indicator window. StochRSI(14) is in the lower indicator window. This full Stochastic Oscillator setting (14,1,1) is essentially the Fast Stochastic Oscillator. 

First, notice how the Stochastic Oscillator (14,1,1) matches with StochRSI(14). Second, notice that StochRSI oscillates between zero and one. So what does 14-day StochRSI actually tell us? A move to 1 signals that 14-day RSI is at a 14-day high. A move to 0 signals that 14-day RSI  is at a 14-day low. Note that a surge to 1 often signals an upside breakout in RSI, while a plunge to 0 signals a downside break in RSI. These signals can be used to get the jump on a change in momentum. The green areas show StochRSI surging above .80 and the Stochastic Oscillator surging above 80. You can read more about StochRSI in our ChartSchool article.

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to MailBag to be notified whenever a new post is added to this blog!
Hello Arthur Thank you for highlighting the StochRSI. You have the shown the connection between RSI and Stochastic oscillator beautifully. The StochRSI is particularly useful if you want to use much longer time periods than the usual 14-periods. For example, if you use 100 periods, RSI will be flat and featureless. The StochRSI tells the story more clearly, and it is easier to identify the underlying trend, as well as meaningful overbought/oversold conditions during major trends. Thank you again for an insightful blog. Tushar Chande
Thanks for writing in. I will check out the 100-period version. Best! Arthur
comments powered by Disqus