Indicators · 6 min read

RSI explained: momentum, ranges and divergence

Understand what RSI measures, why overbought does not automatically mean sell, and how to read RSI alongside price on NIFTY, BANKNIFTY and stocks.

RSI is a momentum oscillator

The Relative Strength Index compares recent upward and downward price movement on a bounded scale. It is commonly used to describe momentum, not to predict a guaranteed reversal.

In a strong trend, RSI can remain elevated or depressed for longer than expected. Treat the reading as context and define what price action would confirm or invalidate your idea.

A practical RSI workflow

Begin with the price chart and mark the relevant support, resistance, and session levels. Then use RSI to ask whether momentum confirms the move, weakens while price extends, or changes regime.

For NIFTY and BANKNIFTY, compare the same RSI settings across timeframes instead of changing parameters until the historical chart looks attractive. Test any strategy on representative data before relying on it.

Related guides and tools

Continue with the docs

Try the workflow on charting

Open a live Indian-market chart, add the indicator, and save the layout you want to revisit.