That is, if RSI were to eventually move above 70 or below 30, it would not be uncommon for it to remain above or below those levels for some period of time without retreating back to neutral RSI territory between 30 and 70 (or between 20 and 80, depending on the levels that you use).
RSI can remain in overbought or oversold territory for an extended period of time (weeks or even months). Trading signals generated by RSI are also given more credence when the reading rises above 70 and stays above that level for an extended period of time, or drops below 30 and stays below that level for an extended period of time. Thus, an RSI reading near 100 (the top of the RSI scale) would be greater evidence of overbought conditions (a sell signal), while an RSI reading near 0 (the bottom of the RSI scale) would suggest oversold conditions (a buy signal). Trading signals generated by RSI are generally thought to be most valid when values reach an extreme reading near the upper or lower end of the boundaries. Alternatively, if RSI were to rise to 80, this would generate a sell signal. Here, if RSI were to drop to 20, that would generate a buy signal. Instead of using 30 and 70 as oversold and overbought levels, one common modification that you might employ is to widen the parameters to 20 and 80. Some users of RSI and other indicators adjust the rules based on their own preferences and analysis.
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