Does a high RSI mean it is expensive, and a low RSI mean it is cheap?
RSI is not a price tag for a company, but a number that compares the strength of recent upward and downward movements.
Table of contents
Remember this first
First, 3 things to remember
- 1RSI compares the magnitude of recent gains and losses.
- 270 and 30 are frequently used reference figures, not automated trading signals.
- 3High or low values can persist for some time.
RSI looks at the balance of recent price changes.
RSI is a chart indicator expressed as a value between 0 and 100. An indicator is a value calculated from data like price to make it easier to read. RSI compares the magnitude of gains and losses over a set period.
Calculations do not include a company's revenue or debt. An RSI of 80 does not mean the company is 80% expensive, nor does 20 mean it is 80% discounted.
The terms overbought and oversold are easy to misunderstand.
When RSI is above 70, it is commonly called overbought, and when it is below 30, it is called oversold. These are reference terms to see if recent movements are skewed in one direction. It does not mean that the price will necessarily move in the opposite direction upon reaching those numbers.
If prices rise continuously, such as 10→11→12→13 KRW, a high RSI may persist. Stocks that continue to fall can maintain a low RSI for a long time.
Look at the actual price alongside the number.
Check whether the stock price is rising along with the RSI, or if the stock price is still falling. Also, note whether the RSI is viewed on a 1-minute chart or a daily chart.
Instead of memorizing 70 and 300,000 to buy and sell right away, start by practicing finding examples where different outcomes followed high and low values.
You should not make such assumptions
“It cannot go any lower below RSI 30, right?”
This means there has been significant recent downward volatility. It does not determine how much further the price might fall.
Check what you have read.
- Have you checked the bar cycle and period of the RSI?
- Is the actual price moving in the same direction?
- Have you also observed cases where high or low values persisted?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 2
- Relative Strength IndexNew window
Fidelity Investments · Verify 2026-10-20
RSI range, calculation, and persistence of extreme values in strong trends
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.