What Does RSI Below 30 Mean? Oversold Explained
An RSI (relative strength index) below 30 means a stock has fallen far and fast over the last 14 days, so many traders call it oversold. It does not mean it will rebound: a stock can stay oversold for weeks, or for a reason. As of October 16, 2026, 8 of the 294 stocks this site tracks have an RSI under 30, and in this site's forward log of oversold signals only 9% bounced 5% within 10 days, against 20% for the average stock.
How is RSI calculated?
RSI = 100 − 100 ÷ (1 + RS), where RS = average gain ÷ average loss over 14 days
J. Welles Wilder introduced it in 1978. If a stock's average daily gain over the last 14 days is the same as its average loss, RS is 1 and the RSI is 50. A string of losses pushes it toward 0 and a string of gains toward 100. See RSI in the glossary.
| RSI | Common name | What it says |
|---|---|---|
| Below 30 | Oversold | Selling has been heavy; a bounce is possible but not due |
| 30 to 70 | Neutral | No strong momentum either way |
| Above 70 | Overbought | Buying has been heavy; a pullback is possible but not due |
The RSI scale. The S&P 500's own 14-day RSI was 43.8 on 2026-10-16. Source: SPY daily prices.
Does a low RSI predict a rebound?
This site keeps a forward log: every stock that newly shows an oversold signal is logged with its close and checked 10 trading days later, to see whether it closed up 5% or more at any point. The log started on September 18, 2026, so it is still a single cohort:
| Group (cohort of Sept 18) | Stocks | Rose 5%+ within 10 days | Median change after 10 days |
|---|---|---|---|
| Stocks with oversold signals | 33 | 9% | -4.5% |
| All tracked stocks | 294 | 20% | -2.1% |
| S&P 500 (SPY) | - | - | 1.0% |
One cohort proves little, but it makes the point: an oversold reading did not make a bounce more likely than for any other stock. The log is meant to keep that claim honest as it grows.
What else should you check with an oversold stock?
RSI cannot tell an oversold stock from a broken one. This site counts five oversold conditions (RSI under 30, at least 15% below the 20-day average, under the lower Bollinger band, volume at least twice its 30-day average, and within 1.5% of the 52-week low), then runs seven falling-knife checks on leverage, liquidity, profitability, interest coverage, revenue, drawdown and insider selling. Today 34 of 294 stocks show at least one oversold condition. The full rules are in how the Mean Reversion Screener works, and the screener lists them.
A low RSI for a stock with weak cash flow is closer to a value trap than a dip. Nothing here is a buy signal.
RSI FAQ
What does an RSI of 30 mean?
It is the conventional line below which a stock is called oversold: over the last 14 days its average losses have been much larger than its average gains.
Is RSI below 30 a buy signal?
No. It describes how far a price has fallen, not why. Stocks can stay oversold for a long time, and a low RSI on a weakening business is a warning, not an opportunity.
What RSI period should I use?
Wilder's original is 14 days, and it is the most common. Shorter periods such as RSI(2) react faster and trigger more often, so each needs its own thresholds.
What is the difference between oversold and a falling knife?
Oversold describes price. A falling knife is an oversold stock that is also structurally weak, for example heavily indebted, unprofitable or in freefall, which this site's seven guardrails check.
How do I see which stocks are oversold now?
The Mean Reversion Screener lists every tracked stock showing at least one oversold condition, with its RSI, its distance from key averages and its falling-knife flags.