Plain-English definitions, reviewed by an independent investor
RSI (Relative Strength Index)
RSI gauges recent momentum on a 0–100 scale to flag when a stock may be overbought or oversold.
RSI gauges recent momentum on a 0–100 scale to flag when a stock may be overbought or oversold.
RSI = 100 − 100 ÷ (1 + Average Gain ÷ Average Loss)
Why it matters
It helps spot extremes where a reversal may be due.
Common confusion
Strong trends can stay overbought for a long time; RSI alone is not a trigger.
Frequently Asked Questions
What RSI is oversold?
Below 30 is the common oversold line; above 70 oversold’s opposite, overbought.
Use RSI alone?
Better with trend and volume; it confirms, it does not decide.