The concept
What it measures: the relative strength of recent gains vs losses, scaled 0–100 (usually 14 periods).
Why it matters
It summarises momentum.
How markets interpret it
Readings above 70 are often called 'overbought' and below 30 'oversold'. It does NOT mean price must reverse — strong trends can stay overbought for weeks.
Key takeaways
- RSI measures momentum.
- Indicators describe past prices. None predicts the future.
Knowledge check
RSI above 70 means…