Relative Vigor Index
The Relative Vigor Index (RVI) is a momentum oscillator developed by John Ehlers that measures the vigor of a price move by comparing the closing price to the opening price relative to the day's trading range, on the premise that prices tend to close higher than they open in uptrends.
John Ehlers introduced the Relative Vigor Index in the early 2000s drawing on the observation that in a rising market, prices tended to close near the high of the day and higher than the open, while in a declining market they tended to close near the low and below the open. The RVI formalised this tendency using a calculation inspired by harmonic analysis: each period's 'numerator' was a weighted average of (Close − Open) values over four periods, and the denominator was a weighted average of (High − Low) values over the same four periods. Both were then smoothed using a 10-period SMA, and a 4-period signal line was derived similarly to the MACD signal line.
The formula: Numerator = SMA((Close − Open) weighted symmetrically over four periods); Denominator = SMA((High − Low) weighted over four periods); RVI = SMA of Numerator ÷ SMA of Denominator. Signal Line = 4-period symmetric SMA of RVI. Crossovers of the RVI above its signal line were interpreted as bullish momentum; crossovers below as bearish.
The RVI was less universally used than the RSI or MACD but found a niche among practitioners who were specifically interested in the open-to-close price behaviour as a distinct signal from close-to-close momentum. On Indian intraday data — where opening prices on NSE reflected overnight global moves consolidated into a single open — the RVI's open-relative logic was considered potentially meaningful. Stocks that gapped up at open and then continued to close near the daily high were precisely the kind of 'vigor' the indicator was designed to detect.
In systematic trading strategy research on Indian equities, the RVI occasionally appeared as a factor in multi-signal models where researchers tested large numbers of technical indicators for predictive value. Its correlation with the MACD was moderate rather than high, suggesting it carried some independent information about price momentum structure — particularly information embedded in the open-to-close dynamic that close-to-close indicators missed.
Practitioners noted that the RVI was most reliable in liquid, actively traded stocks where the opening price was a meaningful market event rather than an artifact of thin early-morning order matching. On less liquid mid-cap stocks where the opening auction resulted in a price driven by a small number of orders, the open-to-close calculation could be distorted by microstructure noise, reducing the indicator's interpretive value. This consideration prompted many analysts to restrict RVI use to index futures and top Nifty 100 names with consistently deep opening auction order books.