Relative Strength Index (RSI) shows the internal strength of a stock over a given time period, say 14 days. The RSI ranges between 0 and 100. Analysts usually look for a divergence in which the stock trends upward while the RSI trends downward, and vice versa. Prices are expected to correct and move in the direction of the RSI. If RSI is greater than 80, the price would enter the overbought zone and should be sold in batches; if RSI is greater than 90, it's sign of a severely overbought, the stock price will go back at any time, and it is recommended to sell the shares. RSI is less than 20, the price has entered the oversold zone, you should buy in batches; RSI is less than 10, which means that it is seriously oversold and traders should go for a dip.

Figure 1: RSI > 70
Figure 2: RSI < 30