What is RSI? How to read the number on a real chart

How it is calculated

Take Apple's last 14 trading days, up to and including Nov 6, 2026. Add up the rises and the falls separately, and divide each by 14.

The chart shows 51.5 for the same day. Software smooths the averages over a longer time, so the number differs a little from the simple calculation.

How often is RSI under 30 or over 70?

Among 20 of the largest US companies since 2000, or since their listing, RSI was under 30 on 2.5% of days and over 70 on 8.7%. So it is unusual.

Over 70 is more common because these companies have risen over the period.

Does overbought mean the stock will fall?

Three months after RSI went over 70, the stock had risen in 64.0% of cases, against 64.7% on an ordinary day. After RSI went under 30: 65.5% against 63.6%. Read the whole study.

The differences cannot be told apart from chance.

Over one week something shows. In the week after RSI went over 70 the stock moved +0.2% on average, against +0.5% on an ordinary day. After RSI went under 30 it moved +1.6%, against +0.5%. A week is short, and among eight such comparisons one or two can land outside by chance.

A strong stock can also stay there for a long time. Nvidia stayed over 70 for 27 trading days in a row, from Jan 10, 2024 to Feb 16, 2024, and rose 33.6% in that time.

What the number says, and what it does not say

RSI shows how fast the price has moved. It says nothing about why. A high number can come from a strong report, and a low one from a cut forecast or because the whole market fell. See the course on why stocks move. RSI is one of several such indicators: MACD and the stochastic oscillator use the same prices, and they don't always say the same thing.