Relative Vigor Index


    A technical indicator based on the premise that during an uptrend, the closing price is usually higher than the open price.  Conversely, during a downtrend, the closing price is usually lower than the open price.  The calculation formula is:

    RVI = (Close – Open) / (High – Low)

    For further smoothing, a 10-period Simple Moving Average may be applied on the resulting RVI.  Furthermore, a 4-period Signal Line may be constructed by applying a Symmetrical Weighted Moving Average on RVI.

    A potential buy signal is triggered when there is a positive divergence between the oscillator and price, especially when RVI is in extreme oversold territory.  Conversely, a potential sell signal is in place when there is a negative divergence and RVI is in extreme overbought territory.

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