Great Article on Using RSI to pick Stocks

Now this is a very good article on Tradingmarkets.com about using a 2 period RSI (Relative Strength Index ) to pick stocks. And this is quite a sample size that they are using as well:

We looked at over seven million trades from 1/1/95 to 6/30/06. The
table below shows the average percentage gain/loss for all stocks during our
test period over a 1-day, 2-day, and 1-week (5-days) period. These numbers
represent the benchmark which we use for comparisons.

I certainly like when the 2 period RSI is 1 or less. A 1 day return is (+0.27,) 2 days (+0.62%,) and 1-week later (+1.05%) I am going to add this to my list of things to check on for a stock. It will certainly help time an entry point. They even have some trading strategies based around this aspect of the 2 period RSI as well:

This research we're presenting here is just the tip of the iceberg
using the 2-period RSI. For example, greater results can be found by looking for
multiple day readings under 10, 5 or 2. And, even greater results can be
achieved by combining the readings with other factors such as buying a low level
RSI stock if it trades 1-3% lower intraday. As time passes we'll share some of
these research findings, along with handful of trading strategies with
you.