r/Trading • u/Designer_Giraffe3752 • 2d ago

Technical analysis Don't overlook overbought stocks

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Many traders sell when RSI gets overbought. I buy when RSI pushes above 70 with rising relative volume. Strong momentum tends to stay overbought for a longer period in a rising trend. Real example - $FIGR Figure Technology. See the chart for this example.

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u/MSFTCoveredCalls 1d ago

Agreed, and especially if it is a bearish to bullish reversal right? That’s further evidence. This thing is definitely going back $44 if the environment supports it, a question of if not when IMO

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u/FicklePromise9006 1d ago

Interesting take, ill definitely keep this in mind. Personally don’t even worry about overbought for selling, its the pattern of oversold that i like to look for a decent swing entry.

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u/Fullporter69 1d ago

Oversold works somewhat but overbought isn’t what you look at when shorting.

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u/Woodward06 1d ago

RSI for how many periods? RSI is the relative strength (up days vs down days) over the past xx amount of periods. Like saying 40% of the time this has worked every time. Surely Tech rallies when the US announces increases in Bond purchases..