RSI screener guide for NSE stocks

"RSI below 30" is probably the most-run scan in retail screening, and run bare, it is one of the worst. The list it returns is dominated by stocks that are oversold because they are dying — downtrends make low RSI readings constantly, and buying them is catching knives with a number attached.

The fix is one condition. But it helps to know what RSI actually measures first.

What RSI is

The Relative Strength Index compares the average size of recent up-days to recent down-days over a window (almost always 14 sessions) and squashes the ratio to 0–100. Above 70 means the recent tape has been one-sidedly bullish; below 30, one-sidedly sellers. It measures one-sidedness, not value — nothing about RSI says a stock is cheap, only that its recent sessions have leaned hard one way.

One-sidedness tends to resolve. That reversion is the entire edge, and it only pays when the larger context says the resolution should be upward.

The one-condition fix

where rsi(14) < 30 and close > sma(200)

The 200-day filter splits the oversold list into its two populations. Oversold above the 200-day is a healthy stock having a bad fortnight — an owner base in profit, defending. Oversold below it is a downtrend doing what downtrends do; it can stay below RSI 30 for months. Same reading, opposite trades.

The prebuilt version adds one more refinement — it waits for the turn rather than buying the reading:

where rsi(14) crossed above 30 within 3 bars and close > sma(200)

Crossing back above 30 is the first measurable evidence the selling stopped. Run it: RSI oversold, turning up.

The level nobody screens for: 50

In an actual uptrend, RSI rarely reaches 30 at all — pullbacks bottom near 40–45 and turn. Waiting for the textbook 30 means missing every routine dip in every strong stock. Two scans cover the trending case:

• RSI reclaiming 50 — the midline cross is the earlier, more frequent buy signal inside uptrends; it marks "pullback over" rather than "washout over."
• Pullback in an uptrend — RSI under 40 with the 200-day intact. Rare by construction, which is why the list is short and worth reading on the days it isn't empty.

For the hair-trigger version there is Stochastic RSI oversold — the stochastic formula applied to RSI itself, reaching extremes on dips plain RSI barely registers. It fires often; treat it as a shortlist builder, not a signal.

The other side

RSI above 70 in a stock you hold is not automatically a sell — strong trends spend weeks above 70, and "overbought" is often just "working." What it is: a reason to move a stop up, and in weak stocks, a fade candidate. RSI overbought keeps the strong-trend context (close > sma(50)) so the list reads as "extended," not "doomed." The wider reversal family has the CCI, Williams %R and stochastic variants of both sides.

Check the levels against reality

Every threshold in this guide — 30, 40, 50, 70 — is convention, and convention is checkable. Each scan page carries a hit-rate replay across the past year of NSE sessions: how often did the signal resolve upward, over what horizon, at what cost when it failed? Ten minutes of replay on the oversold-turn scan versus a bare RSI-below-30 query will teach you more about RSI on Indian stocks than any tutorial — including this one.