 "21 stocks have something to offer before they enter oversold zone on RSI")
Momentum oscillator Relative Strength Index (RSI), which was developed by J Welles Wilder, explains the strength and movement of stock prices to determine the overbought and oversold regions. The oscillator moves between 0 to 100.
Theoretically, If RSI for any stock enters 70 level, it is considered as overbought zone and if it moves below 30, the stock is known to have slipped into oversold territory. It also helps to identify the trend on divergence in prices.
Theoretically, If RSI for any stock enters 70 level, it is considered as overbought zone and if it moves below 30, the stock is known to have slipped into oversold territory. It also helps to identify the trend on divergence in prices.
In various studies, the oscillator is used to generate signal on price patterns and trendline levels. Analysts have correlated RSI with other indicators to gauge better results.
When a stock's price approach near 70 levels, the trend starts to deteriorate and prices start to rise on a slower pace. Few stocks trade flat, while others start losing grounds.
Here is the list of stocks from Nifty500 index, which have breached 60 levels on RSI and are heading towards overbought territory:-
| Nifty500 stocks crossing 60 levels on RSI | ||
| Company Name | Symbol | RSI Level |
| Adani Power Ltd. | ADANIPOWER | 61.57 |
| AIA Engineering Ltd. | AIAENG | 61.18 |
| Axis Bank Ltd. | AXISBANK | 60.33 |
| Bajaj Finserv Ltd. | BAJAJFINSV | 62.53 |
| Bharat Forge Ltd. | BHARATFORG | 61.05 |
| Cyient Ltd. | CYIENT | 61.3 |
| Elgi Equipments Ltd. | ELGIEQUIP | 63.03 |
| Endurance Technologies Ltd. | ENDURANCE | 60.14 |
| Grasim Industries Ltd. | GRASIM | 60.53 |
| Indian Oil Corporation Ltd. | IOC | 64.24 |
| India Tourism Development Corporation Ltd. | ITDC | 62.2 |
| Lakshmi Machine Works Ltd. | LAXMIMACH | 60.16 |
| Max India Ltd. | MAXINDIA | 60.79 |
| Narayana Hrudayalaya Ltd. | NH | 60.45 |
| Shriram Transport Finance Co. Ltd. | SRTRANSFIN | 60.3 |
| Supreme Industries Ltd. | SUPREMEIND | 64.49 |
| Symphony Ltd. | SYMPHONY | 66.41 |
| Tata Motors Ltd. | TATAMOTORS | 62.34 |
| UltraTech Cement Ltd. | ULTRACEMCO | 63.62 |
| WABCO India Ltd. | WABCOINDIA | 62.78 |
| Zee Entertainment Enterprises Ltd. | ZEEL | 64.23 |
Most of the stocks that enter overbought region witness rally towards 75 – 78 and see selling pressure. The correction might not be severe; however, the trend eliminates the speed to which prices rise.
| Company Name | Symbol | RSI Level |
| Balrampur Chini Mills Ltd. | BALRAMCHIN | 78.37 |
| Bata India Ltd. | BATAINDIA | 76.55 |
| Greenply Industries Ltd. | GREENPLY | 73 |
| Manappuram Finance Ltd. | MANAPPURAM | 74.63 |
| Sundaram Finance Ltd. | SUNDARMFIN | 71.58 |
| Sun TV Network Ltd. | SUNTV | 71.26 |
| Swan Energy Ltd. | SWANENERGY | 85.92 |
| Tech Mahindra Ltd. | TECHM | 73.2 |
| UPL Ltd. | UPL | 73.89 |
| Wipro Ltd. | WIPRO | 70.15 |
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