What is a good RSI to buy at?

There is no magic number. RSI between 40 and 65 in an uptrend is generally healthy. Above 70 means the stock is overbought after a fast move; below 30 means oversold. Neither is an automatic buy or sell signal.

Does RSI above 70 mean sell?

Not necessarily. Strong stocks can stay overbought for weeks in a powerful trend. RSI above 70 means the risk of a short-term pullback is elevated — it is a caution flag, not a sell command.

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What is RSI (Relative Strength Index)?

RSI — the Relative Strength Index — measures how fast and how far a stock has moved recently, on a scale of 0 to 100. It answers one question: has this stock been bought (or sold) too hard, too fast?

How to read the number

Above 70 — overbought. The stock has risen quickly. It doesn't mean the rally is over, but buying here means paying top-of-range prices, and short-term pullbacks become more likely.
40 to 65 — the healthy zone. Enough momentum to matter, not so much that the move looks exhausted. Most sustainable trends spend their time here.
Below 30 — oversold. The stock has been sold hard. Sometimes this marks a bounce point — but oversold stocks in downtrends often just keep falling. Cheap can get cheaper.

Example: A stock rallies 15% in eight sessions and RSI hits 78. Nothing is "wrong" with it — but buyers at this point are paying up after the move rather than before it. A patient buyer often gets a better price within days.

The classic beginner mistakes

Mistake 1: treating RSI 70 as an automatic sell. The strongest stocks stay overbought for long stretches. Selling a winner just because RSI crossed 70 is how people exit great trends early.

Mistake 2: buying just because RSI is below 30. In a confirmed downtrend, oversold is normal, not a bargain signal. RSI works best with the trend, not against it.

Mistake 3: using RSI alone. RSI describes speed, not direction or quality. A stock can have a healthy RSI while its trend is broken.

How RSI is actually calculated

RSI compares the average size of recent up-days against recent down-days (typically over 14 sessions). More and bigger up-days push it toward 100; the reverse pushes it toward 0. That's all it is — a speedometer for recent buying pressure.

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Educational only — not financial advice. This guide explains general concepts for learning purposes and is not a recommendation to buy or sell any security. Always do your own research and consult a licensed financial adviser before investing.

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