Relative Strength Index (RSI) is a versatile momentum indicator, and while the default levels are 30 (oversold) and 70 (overbought), experienced traders often read more granular zones for early signals, divergence, and trend strength
Level 0 to 20
- Extremely Oversold
- Rare. Look for bullish divergence or reversal setups
Level 20 to 30
- Oversold Zone
- Possible bottoming. Wait for RSI to cross back above 30 for entry
Level 30 to 40
- Weak Recovery
- Still bearish bias. Often resistance in a downtrend
Level 40 to 50
- Neutral Bearish Bias
- Key zone — if RSI fails to break above 50, downtrend may continue
- Midpoint / Trend Pivot
- A break and hold above 50 often signals trend reversal upward
- Neutral Bullish Bias
- Building strength — good for early long entries
- Strong Bullish
- Trend confirmation zone — often support in uptrend
- Overbought Zone
- Caution zone — may continue higher, or form bearish divergence
- Extremely Overbought
- Unsustainable — look for reversal signs or exit longs
Divergence signals
RSI divergence is one of the most powerful early-warning tools for reversals and trend exhaustion. It’s especially useful when combined with price action or tools like Supertrend, or MACD
Bullish Regular
- Strong signal strength
- Price forms lower lows , RSI forms higher lows , Price action new swing low
- RSI stays above 30 or bounces
- Strong reversal clue after a downtrend. Look for confirmation with candle reversal or volume spike.
Bearish Regular
- Strong signal strength
- Price forms higher highs , RSI forms lower highs , Price action new swing high
- RSI turns from below 70
- Classic signal of trend exhaustion. Ideal near resistance. Use trailing stop if already long.
Bullish Hidden
- Moderate signal strength
- Price forms higher lows , RSI forms lower lows. Price action indicating pullback in uptrend
- RSI dips near 30 and reverses
- Signals trend continuation often missed. Look for price bounce confirmation.
- Moderate signal strength
- Price forms lower highs , RSI continues lower lows continuation - often missed. Price action indicating pullback in uptrend
- RSI dips near 30 and reverses
- Signals trend continuation often missed. Look for price bounce confirmation
Bearish Hidden
- Moderate signal strength
- Price forms lower highs , RSI continues lower lows continuation - often missed. Price action indicating pullback in downtrend
- RSI rises near 60-70 then turns
- Suggests continuation of downtrend. Short on resistance rejection.
Exaggerated Bullish
- Low signal strength
- Price forms double bottom , RSI forms higher low. Price action equal lows
- RSI makes a stronger second bottom
- Often near support zones. Use breakout of neckline for entry.
Exaggerated Bearish
- Low signal strength
- Price forms double top, RSI forms lower highs. Price action equal highs
- RSI weakens on 2nd top
- Use only with confluence (e.g. resistance + volume drop)
Disclaimer:
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only and should not be construed as financial advice. The content is
based on publicly available information and personal opinions. Readers
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