RSI (relative strength index), explained
RSI is a quick gauge of whether a stock's recent move has run too far. Here's how to read it without being misled by it.
What it is
The relative strength index is a momentum indicator that moves between 0 and 100. It measures how fast and how far a stock has moved recently, to gauge whether a run has gone too far in one direction. It's about the price's behaviour, not the company's fundamentals.
How to read it
| RSI | Reading |
|---|---|
| Above 70 | Potentially overbought — the rally may be stretched |
| 30 – 70 | Neutral range |
| Below 30 | Potentially oversold — the sell-off may be overdone |
How to use it sensibly
RSI is a timing aid, not a buy or sell button. A stock can stay "overbought" for a long time in a strong uptrend, and "oversold" while it keeps falling. It's most useful as a sanity check — flagging when a price move may have run ahead of itself — and best combined with the fundamentals and the trend, never used alone.
Oak Growth shows RSI alongside moving averages so you can read momentum and trend together.
Put this into practice — open the screener →