Use the closing share prices in the table above to compute the share’s relative strength index (RSI) for (1) the 20-day period from 30/09/10 to 31/10/10; and (2) the 22-day period from 30/11/10 to...

Use the closing share prices in the table above to compute the share’s relative strength index (RSI) for (1) the 20-day period from 30/09/10 to 31/10/10; and (2) the 22-day period from 30/11/10 to 31/12/10. (Hint: Use a simple (unweighted) average to compute the numerator (average price change on up days) and the denominator (average price change on down days) of the RSI formula shown on page 302.)

a. Contrast the two RSI measures you computed. Is the index getting bigger or smaller, and is that good or bad?

b. Is the latest RSI measure giving a buy or a sell signal? Explain.