RSI & Momentum
How the Relative Strength Index measures momentum, what overbought and oversold really mean, and its common pitfalls.
Chapter 1 of 2
INTERMEDIATEWhat RSI actually measures
The Relative Strength Index (RSI) is a momentum oscillator that compares the average size of recent gains to the average size of recent losses over a lookback period (14 periods is the standard default), producing a value between 0 and 100.
A high RSI (conventionally above 70) indicates that recent price gains have been large and frequent relative to losses -- often described as 'overbought'. A low RSI (below 30) indicates the opposite -- 'oversold'. These labels describe the recent speed of price movement, not a price ceiling or floor.
Real, unmodified public market data, shown for educational purposes only. This is not personalized investment advice and is not a signal to act.
Quick Check
An RSI reading above 70 means: