The Relative Strength Index, or RSI, is a momentum indicator that compares the size of recent gains to recent losses over a set lookback period, traditionally 14 periods, and expresses the result on a scale from 0 to 100.
Readings above 70 are conventionally described as overbought and readings below 30 as oversold, terms that indicate momentum has been strong in one direction rather than guaranteeing a reversal. Analysts also watch for divergence, where price and RSI move in opposite directions.
RSI is a derived, lagging measure based entirely on past prices. It can stay in overbought or oversold territory for extended stretches during strong trends, so it is used as one descriptive input among many rather than as a standalone instruction to act.