Understanding the RSI Indicator
Worked Example: These Figures Today
The companies used as examples above, with the live figures behind them. Illustrations of the metric — not a ranking, not a shortlist, and not a recommendation.
| Ticker | Company | Price | Change | Market Cap | P/E | MoonshotScore |
|---|---|---|---|---|---|---|
| AAPL | Apple Inc. | $332.61 | +1.85% | $4.9T | 37.5 | 89 |
| TSLA | Tesla, Inc. | $363.56 | -1.16% | $1.4T | 308.1 | 53 |
| NVDA | NVIDIA Corporation | $218.36 | -2.37% | $5.3T | 27.5 | 91 |
Applying RSI to Technology Stocks
“MoonshotScore rates a US-listed stock 0 to 100 — higher means stronger numbers. Most carry an older nine-factor score; the rest use five sector-relative pillars, re-ranked daily — common stocks and ADRs only. Funds, ETFs, warrants, units, SPACs, preferreds, and notes carry none. It is built for education and deeper due diligence, not financial advice.”
Questions worth resolving before acting on the screen
What is the best RSI period setting?
The standard setting is 14 periods, but this can be adjusted based on trading style and asset volatility. Shorter periods (e.g., 9) are more sensitive to price changes, while longer periods (e.g., 25) provide smoother readings.
How can RSI be used with other indicators?
RSI can be combined with moving averages, MACD, and Fibonacci retracements to improve signal accuracy. For example, a buy signal is stronger when RSI is oversold and a bullish MACD crossover occurs.
What are the limitations of using RSI?
RSI is prone to generating false signals, especially in trending markets. It is essential to use RSI in conjunction with other forms of analysis and risk management techniques to mitigate potential losses.
Can RSI be used on all types of assets?
Yes, RSI can be applied to stocks, bonds, currencies, and commodities. However, the interpretation of RSI may vary depending on the specific characteristics of each asset class.
How does RSI divergence signal potential trend changes?
Bullish divergence occurs when the price makes lower lows, but RSI makes higher lows, suggesting a potential upward reversal. Bearish divergence occurs when the price makes higher highs, but RSI makes lower highs, signaling a potential downward reversal.