Moving Average is a tool used to smoothen the otherwise rough price chart. It helps us identify bullish and bearish trends. Like a magnet it both attracts and repels the price to and from it. When the price goes up, it brings it down to the average line and when the price comes to the line, it pushes it away. Because they work only during trending sessions and not when the price is moving sideways, it cannot be used as a decision making tool. Fundamentally, we are pained to find out if the stock is trending / moving sideways.
Overcoming the key pitfall of the moving average, RSI works well as a non trending indicator when the prices are moving sideways. It provides the band which denotes the prices that indicate both strength and weakness. When the price crosses the lower band after hitting a low and bouncing back, you can buy the stock. You can sell the stock when the price crosses the top band AND hits a top AND then comes towards the top band to cross it and go below.
