RSI (Relative Strength Index) — What It Is and How to Read It
RSI is a technical oscillator ranging from 0 to 100 that measures the speed and magnitude of a stock's recent price changes — a value above 70 is considered 'overbought', below 30 is considered 'oversold'.
RSI (Relative Strength Index) is calculated from the ratio of up days to down days over a given period (usually 14 trading days). The result is a single number that summarizes whether a stock has moved too far, too fast, in either direction relative to its usual pace.
A value above 70 suggests the stock has risen a lot and fast, so there's an elevated chance of a nearby correction — but it's not a certainty. A stock in an especially strong uptrend can stay above 70 for weeks, and anyone who sells automatically on every such crossing risks exiting a profitable trend too early.
The same applies in reverse: a value below 30 doesn't mean 'buy now' — a stock in a sharp downtrend can stay oversold for a long stretch. RSI is a tool for spotting relative extremes, not a standalone decision rule.
How StockIQ AI uses this
RSI is one of about 23 technical indicators checked in StockIQ's technical category (25% of the score) — evaluated alongside MACD, moving averages, Stochastic, and others, never as a single standalone signal.
Frequently asked questions
Is RSI below 30 a buy signal?
RSI below 30 is traditionally considered 'oversold', and is sometimes read as a potential buy signal — but it's only a supporting signal, not a reliable rule on its own, since a stock in a strong downtrend can stay oversold for an extended period.
How long can RSI stay above 70?
In strong uptrends, RSI can stay above 70 for weeks at a stretch — which is why treating it as an automatic sell trigger on every crossing of 70 is risky, since it can mean exiting a profitable trend far too early.
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The information on this page is intended for general educational purposes only and does not constitute investment advice. Full details on the disclaimer page.