RSI and MACD Indicators: How to Read Them
What is RSI?
The Relative Strength Index (RSI) is a momentum oscillator between 0 and 100. Readings above 70 are considered overbought and below 30 oversold; in strong trends it can stay there for long.
What is MACD?
MACD is the difference between the 12- and 26-period exponential moving averages, read with a 9-period signal line and a histogram. A cross above the signal line suggests rising momentum.
Using them together
When RSI is oversold and MACD turns up, a reversal becomes more likely. Indicators lag, so combine them with price levels and volume.
Origins and standard settings
Wilder introduced RSI in 1978 in 'New Concepts in Technical Trading Systems'; the default period is 14 and readings above 70 and below 30 are read as overbought and oversold[1]. Gerald Appel developed MACD in the late 1970s; the standard setup is the 12- and 26-day exponential averages with a 9-day signal line[2].
Disclaimer
This page is educational, not investment advice.
Frequently asked questions
- What is RSI's default period?
- In RSI, introduced by J. Welles Wilder in 1978, the default period is 14; readings above 70 and below 30 are read as overbought and oversold[1].
- What is the standard MACD setup?
- In MACD, developed by Gerald Appel in the late 1970s, the standard setup is the 12- and 26-day exponential averages with a 9-day signal line[2].
Related guides
Sources
- Relative Strength Index (RSI). StockCharts ChartSchool. Accessed: 2026-10-22.
- MACD (Moving Average Convergence/Divergence) Oscillator. StockCharts ChartSchool. Accessed: 2026-10-22.