Identifying Exhaustion in Rallies
The overbought stocks screener lists equities where bullish momentum has pushed the 14-day Relative Strength Index (RSI) above 70. These are stocks that have seen aggressive buying, leaving them mathematically stretched relative to their historical average price movements.
How Traders Use Overbought Signals
For investors holding these stocks, an RSI over 70 is a prompt to evaluate profit-booking strategies or trailing stop-losses. For active traders, extremely high RSI readings (above 85) combined with bearish reversal patterns (like a shooting star or bearish engulfing) can serve as high-probability short-selling opportunities.