Glossary
RSI (Relative Strength Index)
Technical Analysis
RSI is a momentum oscillator scaled 0-100 that compares the size of recent gains to recent losses, typically over 14 periods.
Readings above 70 are conventionally called overbought and below 30 oversold, but in a strong trend RSI can stay pinned at an extreme for a long time — which is why it is unreliable as a standalone reversal signal.
Practitioners more often use divergence (price makes a new high, RSI does not) and the 40-60 zone as a trend filter: in uptrends RSI tends to bottom near 40, in downtrends it tends to peak near 60.