Glossary
RSI: meaning, example and why it matters
Relative strength index: a 0 to 100 momentum indicator comparing recent gains with recent losses. Readings above about 70 are often called overbought and below about 30 oversold, but strong trends can stay at extremes for a long time.
Worked example
If over 14 periods the average gain is 2 and the average loss is 1, RS = 2 and RSI = 100 − 100 ÷ (1 + 2) = 66.7.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
RSI compresses recent gains and losses into one 0 to 100 number so momentum can be compared across instruments.
Related terms
See it in practice
Frequently asked questions
Does an RSI above 70 mean a price will fall?
No. Strong trends can keep RSI high for a long time. The reading describes recent momentum, not what comes next.
Is this page investment advice?
No. RSI is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.