RSI Indicator Guide for NSE Stock Analysis
The Relative Strength Index, or RSI, describes recent price momentum on a scale from 0 to 100. It is a way to examine price behaviour, rather than a forecast of the next price movement.
What do 30 and 70 mean?
Readings above 70 are commonly described as overbought, and readings below 30 as oversold. These are reference levels, not automatic trading instructions. Strong trends can keep RSI beyond either level for an extended period.
A hypothetical example
Suppose a stock page shows RSI of 75. That reading alone does not tell you that the next price move will be down. A reading of 25 likewise does not establish that a recovery is imminent. Check the price chart and the observation period before drawing a conclusion.
Reading RSI on TejTrade AI
- Open a page from the NSE stocks directory.
- Find the displayed RSI value and check when the underlying data was updated.
- Compare the value with price direction and the other indicators shown.
- Record the observation rather than treating it as a guaranteed outcome.
Why values can differ between platforms
TejTrade AI's current calculation uses rolling average gains and losses over 14 observations. Platforms using Wilder's smoothing can show a different value. Data timing and the selected interval can also affect comparisons; 14 observations do not necessarily mean 14 calendar days.
Common mistakes
- Assuming an extreme reading guarantees an immediate reversal.
- Comparing values without checking the interval and calculation method.
- Using one indicator as a complete assessment of a company.
Further reading
Fidelity's explanation of RSI describes its conventional interpretation and behaviour during strong trends.
This guide is educational and is not a recommendation to buy or sell. Read the site disclaimer.