The Relative Strength Index (RSI) is a momentum gauge that scores how strongly a stock has been rising versus falling recently, on a scale of 0 to 100. A reading above 70 is often called "overbought" (it has risen a lot, fast) and below 30 "oversold" (fallen a lot, fast).
RSI = 100 − [100 ÷ (1 + RS)], where RS is the average gain divided by the average loss over a look-back window (traditionally 14 days). Intuitively: if recent up-days dwarf recent down-days, RS is large and RSI pushes toward 100; if losses dominate, RSI falls toward 0; when gains and losses roughly balance, RSI sits near 50. Example (illustrative): if average gains over the window were three times the average losses, RS = 3, so RSI = 100 − 100÷4 = 75 — in the "overbought" zone.
RSI = 100 − [100 ÷ (1 + RS)], where RS is the average gain divided by the average loss over a look-back window (traditionally 14 days). Balanced gains and losses put RSI near 50.
It's risky to. RSI is a widely-watched, lagging momentum measure, so its plain readings carry little edge on their own and give frequent false signals in trending or choppy markets.
Browse all S&P 500 tickers to see this metric applied to individual companies.
Educational research only — not investment advice.