Glossary · Technical Analysis

RSI (Relative Strength Index)

A momentum indicator measuring overbought or oversold conditions.

RSI oscillates between 0 and 100 and compares the magnitude of recent gains to recent losses. Traditional readings treat the high zone (often above 70) as overbought and the low zone (often below 30) as oversold — though strong trends can keep RSI extreme for a long time.

Beginners should use RSI as context for momentum and exhaustion, not as a standalone “buy below 30” rule. Divergences between RSI and price are another common way people read it.

Example

After a sharp rally, RSI prints 78 while price makes a new high — some traders wait for RSI to roll over before considering a short-term fade.