It is checking states of RSI (comparing it to levels 30 and 70) and, depending on the breaks of those levels, 3 states of the indicator are plotted:
This way, the values of RSI are filtered a bit more. Indicator can be applied to other indicators too, and some combinations seem to be interesting (applying this filter to momentum can be interesting, for example).
PS: shorter period of RSI should be used (longer periods of RSI tend to break 30 and 70 levels in fewer occasions and that might limit it in usage — as it is always advised: regular RSI should be used with short periods — up to period 10 is a sort of consensus).
This indicator can be used together with another indicators.
The CCI pre-filtered indicator with an addition of 18 possible types of averages that can be used for pre-filtering.RSI Floating Levels
Added the filled array for overbought and oversold zones.