Relative Strength Index (RSI)
Centerline, overbought, oversold, reentry, and divergence.
Relative Strength Index (RSI)
| Concept | Explanation | |---|---| | RSI overbought | RSI exceeds an upper threshold, commonly 70. Strong trends can remain overbought. | | RSI oversold | RSI falls below a lower threshold, commonly 30. Strong declines can remain oversold. | | Centerline crossover | RSI crosses above or below 50, suggesting a change in momentum balance. | | Overbought reentry | RSI falls back below the overbought threshold. | | Oversold reentry | RSI rises back above the oversold threshold. | | RSI divergence | Price and RSI form opposing high or low structures. |
Key idea: Overbought means strong recent gains relative to losses; it does not mean price is objectively too high.