RSI — Relative Strength Index

RSI is a momentum oscillator, bounded between 0 and 100, that InvestSense computes using Wilder's original method over a 14-day window — the same standard most trading platforms use.

How to read it

Above 70 is conventionally called "overbought"; below 30, "oversold." These describe the pace of recent price change, not a guaranteed reversal point. In a genuinely strong uptrend, RSI can sit above 70 for an extended stretch — selling purely because RSI crossed 70 is one of the most common misuses of this indicator.

What it's actually measuring

RSI compares the size of recent gains to the size of recent losses over the window. A high RSI means gains have recently dominated losses in both frequency and magnitude — strong upward momentum, not necessarily "the stock is now too expensive."

The real limitation

RSI is derived entirely from past closing prices. It has no awareness of upcoming earnings, news, or anything happening outside the price series itself, and it's least reliable in low-volume stocks and around sudden price gaps, where the underlying averages lag reality.