RSI Signals Most Traders Misread — Overbought Levels & Divergences That Matter

David Keller
by David Keller,
President and Chief Strategist, Sierra Alpha Research

Many traders misunderstand how to interpret RSI, especially when markets appear overbought. In this episode, Dave explains how he uses the Relative Strength Index to identify meaningful momentum shifts, focusing on overbought conditions, bearish divergences, and RSI ranges that can signal changes in trend. Using charts of GOOGL, MS, GLD, and TGT, Dave shows why overbought readings alone are not necessarily bearish—and how exits from overbought levels, combined with divergences, moving averages, and Fibonacci levels, provide more reliable insight into pullbacks and potential reversals.

This video premiered on January 20, 2026. Watch on StockCharts' dedicated David Keller page!

Previously recorded videos from Dave are available at this link.

Indicators Market Analysis Tips & Tricks
David Keller
About The Author:

David is President and Chief Strategist at Sierra Alpha Research LLC, where he helps active investors make better decisions using behavioral finance and technical analysis. He is a former President of the CMT Association. Learn More 

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