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.
The most common beginner mistake is treating RSI above 70 as an automatic sell signal. A strong stock can stay overbought for weeks while it keeps climbing, and a falling one can stay oversold as it keeps dropping. RSI describes momentum, not a verdict — and because everyone can see it, its plain readings carry little edge on their own.
Quantustik does not base its recommendations on textbook indicators like RSI — widely-watched signals are already priced in. Our forecasts come from a quantum-mechanics-based model with calibrated confidence bands, and we favor non-consensus signals over TA anyone can pull up for free. None of this is investment advice.
It signals "overbought" — the stock has risen a lot, quickly. But that is momentum, not a sell signal: a strong stock can stay overbought for weeks while continuing to climb.
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.
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Educational research only — not investment advice.