Question #163 ·
What do the seven day simple moving average and the relative strength index tell us about market strength?
- Seven-day SMA near $120 000 with RSI around fifty indicates bullish momentum
- Seven-day SMA near $110 000 with RSI around seventy indicates overbought momentum
- Seven-day SMA near $110 000 with RSI around fifty indicates balanced momentum Right answer
- Seven-day SMA near $110 000 with RSI around thirty indicates oversold momentum
Why is this the correct answer?
This is correct because the seven-day simple moving average (SMA) around $110,000 shows a stable price trend and the relative strength index (RSI) near 50 signals neither overbought nor oversold conditions. For beginners, a neutral RSI around 50 suggests that buyers and sellers are evenly matched, which often precedes a potential directional move once a new trend emerges.