Momentum Basics8 min readUpdated 2026-04-05
What Is RSI in Nigeria’s Stock Market? (Beginner Explanation)
RSI explained in simple language: what it measures, how to avoid misuse, and how Nigerian investors can combine it with fundamentals.
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RSI in One Sentence
RSI (Relative Strength Index) is a momentum indicator that shows whether recent price action is strong, weak, or potentially stretched.
How Beginners Usually Misuse RSI
Many investors treat RSI alone as a guaranteed buy/sell signal. That often leads to bad timing, especially when fundamentals are ignored.
Safer Way to Use RSI
Use RSI as timing context, not thesis replacement. Pair it with valuation and business quality checks before making decisions.
- RSI high can mean strong momentum, but also overextension risk.
- RSI low can mean weakness, but not automatic rebound.