when the indicator rises to an extremely high reading for that particular asset the indicator is saying the price is overbought and could decline consider waiting for confirmation before selling such as the price starting to fall 
example of how to use the kairi relative indexon the chart below the kri is added to a apple inc aapl weekly chart over more than seven years extreme readings on the upside have typically been 15 or above extremely low readings have been below 10 some of these extremes are marked by vertical lines on the chart with green lines representing kri buy signals and red lines representing kri sell signals while some of these trades would have worked out mainly because apple was in an overall uptrend during the period many signals would have resulted in poor entry and exit points if the kri was used on its own several buy signals occurred when the price of apple was still declining several sell points occurred too early as the price will still moving higher waiting for confirmation of a price reversal once the kri had reached an extreme would have helped prevent some of these early entries and exits difference between the kri and the macdthe kri measures the distance of closing prices to the sma the moving average convergence divergence macd measures the distance between two exponential moving averages a signal line is then typically applied to the macd to generate trade signals limitations of using the kairi relative indexthe kri is tracking how far an asset is from its moving average extreme readings are considered sell or buy signals but users must also note that the more extreme the reading the stronger the trend is prices need to run fast and hard in order to move away from the moving average therefore trying to short a rapidly rising market or buy a rapidly falling market can be like stepping in front of a freight train it is prudent to wait for some other form of verification that the price is actually turning when the kairi indicator reaches an extreme level trades may use other technical indicators or price action to signal the price is turning the kri may turn lower or higher without the asset s price turning lower or higher this can happen because the distance between the price and the sma narrows but the price can still continue in its current direction a simple moving average is the main component of the kri indicator averages are historical in nature and may not provide insight into what will happen in the future 