Section 3 · Chart Reading
RSI
The oscillator that measures how fast price is moving — on a 0–100 scale.
RSI measures the speed and size of recent price moves on a 0–100 scale.
Above 70 = overbought (may pause). Below 30 = oversold (may bounce). Divergence = weakening trend warning. RSI is a tool, not a guarantee — always confirm with price action.
3 things to know
RSI above 70 = stock has moved up very fast recently — extended, may pause.
RSI below 30 = stock has moved down very fast recently — oversold, may bounce.
Divergence: price at new high but RSI lower high = momentum secretly weakening.
Dive Deeper
Key vocabulary — tap each card
Practice
Scenario
A stock has a strong earnings catalyst and moved from $10 to $18 in two days. RSI is at 78. Level 2 shows thin sellers above and T&S shows large green prints still flowing. Do you buy, wait, or avoid?
Did you know?
GME's RSI hit 99 in January 2021 — statistically the highest possible reading. RSI at 99 did not stop the stock from going even higher for two more days before the historic crash.