The Relative Strength Index (RSI) reclaiming 30 is widely considered as a classic “oversold bounce” signal. Traders often assume it marks the end of selling pressure and the beginning of an upward trend.
We analyzed every instance where RSI:
Fell below 30
Crossed back above 30 for the first time
Tracked price action until RSI first touched 40
We intentionally used one stock (TSLA) and one index (QQQ) to determine whether RSI behavior changes depending on the type of instrument being traded: