What is RSI?
RSI (Relative Strength Index) compares the size of a stock’s recent up-moves to its recent down-moves over a lookback window - almost always 14 trading days, hence “RSI-14” - and compresses the result into a single 0-100 reading. A reading above 70 is conventionally read as “overbought” (price has risen sharply and may be due a pullback or pause); below 30 is “oversold” (price has fallen sharply and may be due a bounce). It says nothing about whether the underlying business is good or cheap - it’s a pure price-momentum signal, over a short window.
RSI = 100 − [100 / (1 + RS)], where RS = Average Gain / Average Loss
A stock grinding steadily higher with few down days can sit above 70 for weeks without a reversal - “overbought” is not a sell signal by itself, just a description of recent momentum.
Real RSI-14 across 6 large-cap stocks
CHART
RSI-14 - 6 real stocks
14-day Relative Strength Index as of 2026-10-01.
Stocks compared: Reliance Industries Ltd · Tata Consultancy Services Ltd. · HDFC Bank Ltd. · Infosys Ltd · ICICI Bank Ltd. · Bharti Airtel Ltd.
Reading the spread
Across these 6 stocks, RSI-14 runs from 28.2 (Reliance Industries Ltd) to 49.2 (HDFC Bank Ltd.), a gap of 21.0. The middle value is 34.9, with 3 of 6 above it. The highest reading is 1.7 times the lowest, so the choice of stock changes this number a lot. Neither end is better or worse in itself; the number describes how a stock behaves, and what matters is whether that matches what you want.
How to use it in practice
RSI works best as a timing aid on top of a view you already have, not as a stand-alone signal. In a range-bound stock a reading above 70 or below 30 can mark a stretched move. In a strong trend, however, RSI can stay above 70 for weeks while the price keeps rising, so pair it with a trend measure such as ADX and the moving averages to see whether the move has a trend behind it.
Common mistakes
The classic error is treating 70 as an automatic sell and 30 as an automatic buy. A strong stock can stay overbought for a long time, and a falling one can stay oversold. RSI also tells you nothing about the company’s business or price. It is a short-window momentum reading, so a different lookback period gives a different number.
Frequently asked questions
What does an RSI of 70 mean?
It means the stock’s recent gains have been large compared with its recent losses, a condition traders call overbought. It signals a stretched move, not an automatic fall.
What is the best period for RSI?
The standard setting is 14 days, which is what Punji shows. Shorter periods react faster and produce more signals, longer periods are smoother.
Can RSI be used for mutual funds?
RSI is built for traded prices, so it applies to stocks, ETFs and indices. Mutual fund NAVs update once a day, and RSI is rarely used on them.
WHAT THIS MEANS FOR YOU RSI is a short-term technical signal, not a valuation or quality measure - a fundamentally strong company can show a low RSI during a market-wide selloff, and a weak one can show a high RSI during a speculative run-up. Pair it with the stock’s Quality Score and moving averages (SMA) rather than trading on RSI alone.
METHODOLOGY RSI-14 computed from each stock’s own daily closing-price history as of 2026-10-01. Data: Punji price history. Not investment advice.