The Relative Strength Index (RSI) is one of the most widely used momentum indicators. It measures the speed and size of recent price changes on a scale from 0 to 100.
How it’s calculated
RSI compares the average size of up-moves to the average size of down-moves over a lookback period (commonly 14 days). When gains dominate, RSI rises toward 100; when losses dominate, it falls toward 0.
Reading the levels
- Above 70 — often called "overbought": the stock has risen quickly and momentum is stretched.
- Below 30 — often called "oversold": the stock has fallen quickly.
- Around 50 — momentum is balanced.
The common misunderstanding
"Overbought" does not mean "sell" and "oversold" does not mean "buy". In a strong trend, RSI can stay above 70 (or below 30) for a long time. RSI describes momentum; it does not predict reversals on its own.
How traders use it
RSI is most useful in combination with other context — the trend, support/resistance, and volume. Some watch for divergence, where price makes a new high but RSI does not, as a sign that momentum is fading. Others simply use RSI as a screening filter to surface stocks at an extreme.
In the Screener you can filter by RSI (for example, "RSI below 30") to build a list of stocks at a momentum extreme, then study each chart yourself. RSI is a lens, not a signal.