What is RSI?
RSI (relative strength index) is a number between 0 and 100 showing whether a stock has risen or fallen unusually fast over the last two weeks or so. Above 70 is called "overbought" — sentiment is hot. Below 30 is called "oversold" — many have sold, and the selling pressure may be running out.
The needle sits in the middle: neither too hot nor too cold.
How it works
RSI compares the days the stock rose with the days it fell, over typically 14 trading days. If it rose almost every day, the number shoots up towards 80–90. If it fell almost every day, down towards 20. If it swings normally, RSI stays around 40–60.
So it is not a measure of whether the stock is good or bad — only of how fast it has moved recently.
How to read it
- Above 70 (overbought): The stock has risen fast. Historically a pause or a small dip often follows such a fast rise. That does not mean it will fall — only that it has run hard.
- 30–70: Normal. The number says little.
- Below 30 (oversold): The stock has fallen hard. Selling pressure may be easing — but a stock can keep falling for a long time while RSI is below 30. "Never catch a falling knife" on RSI alone.
What RSI cannot do
RSI knows nothing about the company. A company can be heading for bankruptcy at RSI 25, and a company can be in the best shape of its life at RSI 78. RSI is a thermometer for short-term sentiment — not an assessment of the business. Use it together with what you know about the company, never alone.
The typical beginner's mistake
Buying because RSI is below 30. "Oversold" is not the same as "cheap". Stocks in companies with real problems can sit below 30 for weeks while the price keeps falling.
How you see it in Kiggo
RSI is one of the figures behind Kiggo's "Short term (days–weeks)" verdict. Tap the ring and Kiggo shows the figures behind it and writes, for example: "The stock has risen fast lately (RSI is overbought) — historically a pause often follows". Kiggo also explains that red does not mean "dangerous" — only that the price is pointing down right now.
Related terms
Frequently asked questions
What does RSI stand for?
Relative Strength Index. It was developed in 1978 and is still one of the most used technical figures because it is so simple to read.
How many days is RSI calculated over?
The standard is 14 trading days — about three weeks. It can be calculated over shorter or longer periods, but 14 is the number almost everyone uses, including Kiggo.
Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.
Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.
