RSI: Is the move running out of steam?
What the Relative Strength Index measures, why 70 and 30 matter, and how to spot a bearish or bullish divergence.
RSI measures how fast price is moving
RSI (Relative Strength Index) is a score from 0 to 100, shown in the panel under the chart. It compares recent up days with recent down days.
What to look for
- Above 70 is called overbought. Price ran up fast.
- Below 30 is called oversold. Price fell fast.
- Watch for divergence: price makes a new high but RSI does not.
Overbought does not mean "sell now". Strong stocks can stay overbought for weeks.
Early in this chart RSI climbed to about 87. What is the zone above 70 called?
- Oversold
- Overbought
- Neutral
Show the answer
Overbought. Above 70 is overbought. It tells you the rally was fast, not that it must end. Many beginners lose money by shorting every RSI above 70.
Bearish divergence
Price kept making slightly higher highs, up to ₹756. RSI made lower highs and sat near 64, well below its earlier peak. Each new high had less force behind it. That mismatch is a bearish divergence.
RSI was not overbought at the end. The warning was the divergence, not the level.
Practise RSI, free
Reading about it is step one. In MarketSeekho you see a real NSE chart with the future hidden, call Bull or Bhalu, say why, and get graded on your reasoning, not luck.
Common questions
What is RSI?
RSI (Relative Strength Index) is a score from 0 to 100, shown in the panel under the chart. It compares recent up days with recent down days.
What should I look for with RSI?
Above 70 is called overbought. Price ran up fast. Below 30 is called oversold. Price fell fast. Watch for divergence: price makes a new high but RSI does not.
How can I practise reading RSI for free?
MarketSeekho has a free four-page chapter on RSI (learn, answer a question, spot it on a chart, then make a call) and an unlimited RSI practice game graded on your reasoning. No sign-up or money needed.