Technical Analysis
RSI: Reading Momentum and Overbought/Oversold Levels
The RSI measures momentum and helps identify potential reversals — divergence is its most powerful signal.
Key rules
- RSI above 70 = overbought; below 30 = oversold (contextual)
- In strong trends, RSI extremes can persist — don't fade blindly
- Bullish divergence (price LL, RSI HL) signals potential reversal
- RSI centreline (50) separates bullish from bearish regimes
- Combine with structure and price action, not in isolation
The RSI oscillates between 0 and 100. Above 70 = traditionally overbought; below 30 = oversold. In strong trends, RSI extremes can persist — context matters more than absolute levels.
RSI divergence is most powerful: bullish divergence occurs when price makes a lower low but RSI makes a higher low, signalling weakening bearish momentum.