Traders often rely on RSI to measure the momentum behind a stocks price. It helps identify whether an asset is overvalued or undervalued.
RSI values range from 0 to 100. Traditionally:
- Above 70 = potential downward correction
- Below 30 = oversold
For example, if Tesla stock shows an RSI of 28, traders may interpret it as oversold and prepare for a possible recovery. Conversely, an RSI above 75 could signal that the asset is overbought and might retrace soon.
Many traders combine RSI with:
- Support and resistance levels
- Moving averages
- Volume analysis
Using RSI on different timeframes (e.g., 15min vs. daily) can yield different signals. Platforms like MetaTrader, TradingView, or Webull allow you to adjust the RSI length (default is 14 periods) to fit your trading style.
Beware of false signals RSI isnt foolproof. Always confirm with other indicators or price action.
Even beginners can quickly grasp RSI, learning RSI can add precision to your walt disney analysis.
