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Technical analysis
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The Relative Strength Index (RSI) is a momentum indicator that moves between 0 and 100. It compares the size of recent gains with recent losses, usually over 14 periods, to show how strongly price has been moving up or down.
A high RSI means buyers have dominated recently; a low RSI means sellers have.
The textbook reading is simple:
In a strong uptrend, RSI can stay above 70 for weeks while price keeps rising. Selling just because RSI crossed 70 often means leaving a good trend early. The same is true in reverse for oversold readings in a downtrend.
A better use is context: in an uptrend, look for RSI dipping towards 40-50 as a pullback entry; in a downtrend, look for rallies that fail around 50-60.
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A bearish divergence happens when price makes a new high but RSI makes a lower high, a sign the push is losing strength. A bullish divergence is the reverse at a low.
Divergence is a warning, not a trigger. Wait for price to confirm, for example by breaking a support level, before acting on it.
Check RSI alongside trend and volume in Stock Analysis before adding to a position. If RSI is extremely high, you may prefer to stage your buying with the Position Planner instead of buying everything at once.
This is educational content, not investment advice. Indicators describe past prices and can be wrong.
Not automatically. An RSI below 30 means oversold, but in a strong downtrend it can stay low for a long time. Use it with the trend and other signals.
The standard setting is 14 periods, for example 14 days on a daily chart.
Yes. In a strong uptrend RSI can stay above 70 for weeks, so overbought alone is not a reason to sell.
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