what is RSI and Rsi divergence ?

**RSI (Relative Strength Index)** is a popular technical indicator used in financial markets, primarily to assess the strength or momentum of a security's price movement. It was developed by J. Welles Wilder in the late 1970s.

- **RSI Calculation:** The RSI ranges from 0 to 100 and is typically calculated using 14 periods (though it can be adjusted). The formula compares the magnitude of recent gains to recent losses in price movement, essentially measuring how overbought or oversold an asset might be.
- RSI = 100 - (100 / (1 + RS)), where **RS** is the average of "up closes" divided by the average of "down closes" over the given period.

**Key Levels to Watch:**
- **Overbought:** RSI above 70 typically suggests the asset might be overbought and could face a price reversal or pullback.
- **Oversold:** RSI below 30 typically suggests the asset might be oversold and could experience a price reversal upward.

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**RSI Divergence** occurs when there is a discrepancy between the price movement of an asset and the movement of the RSI.

- **Bullish Divergence:** This happens when the price forms lower lows, but the RSI forms higher lows. It suggests that despite falling prices, the downward momentum is weakening, indicating a potential upward reversal or trend change.

- **Bearish Divergence:** This happens when the price forms higher highs, but the RSI forms lower highs. It suggests that despite rising prices, the upward momentum is weakening, indicating a potential downward reversal or trend change.

### Example:
- **Bullish Divergence:** Imagine a stock price makes a new low, but the RSI makes a higher low. This divergence could signal a buying opportunity as the stock might be oversold and due for a bounce.

- **Bearish Divergence:** If a stock price makes a new high, but the RSI forms a lower high, it may signal a potential selling opportunity because the buying momentum is weakening, and a price drop could be imminent.

RSI divergence is considered a potential signal, but it's often more reliable when used in conjunction with other technical indicators or chart patterns to confirm a potential reversal.