The Relative Strength Index (RSI) is one of the most widely used momentum oscillators in technical analysis. Developed by J. Welles Wilder in 1978, RSI measures the speed and magnitude of price changes on a scale of 0 to 100. An RSI above 70 signals that a stock may be overbought (overvalued), while an RSI below 30 signals it may be oversold (undervalued). RSI is particularly powerful for identifying reversal opportunities in NSE and BSE stocks.
RSI (Relative Strength Index) is a momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100. RSI above 70 = overbought (potential sell signal). RSI below 30 = oversold (potential buy signal). RSI near 50 = neutral momentum.
For intraday trading on NSE/BSE stocks, RSI(14) is the standard. Some intraday traders use RSI(9) or RSI(7) for faster signals. For swing trading, RSI(14) on the daily chart is most reliable. Never use RSI alone — combine with price action or volume confirmation.
Bullish divergence: stock makes lower lows but RSI makes higher lows — potential upward reversal. Bearish divergence: stock makes higher highs but RSI makes lower highs — potential downward reversal. Divergences are more reliable on daily and weekly charts than intraday.
The RSI 50 midline acts as a trend filter. RSI above 50 = bullish trend (take only long trades). RSI below 50 = bearish trend (take only short trades). This helps avoid counter-trend trades. Combine with EMA for a powerful trend + momentum confirmation strategy.
Use our free Stock Scanner at StoxGo to find NSE and BSE stocks with RSI below 30 (oversold) or above 70 (overbought). The scanner updates every trading day with fresh technical setups including RSI-based scans.
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