RSI Oversold Blue-Chip Stocks
The Relative Strength Index (RSI) measures recent gains vs. losses on a 0–100 scale. Readings under 30 are conventionally "oversold," but in a strong downtrend RSI can stay oversold for weeks.
The RSI bands that matter
- Above 70: overbought — caution on entries
- 50–70: normal uptrend
- 30–50: cooling off / mild pullback
- Below 30: oversold — possible mean-reversion
Why RSI under 30 alone is not a buy
An oversold RSI on a stock with declining revenue, falling free cash flow, or below the 200-day SMA usually means the trend is intact, not that a reversal is near. Always confirm with fundamentals and trend filters.
Confirmation checklist
- RSI in 25–35 range
- Stock down 15%–30% from 52-week high
- Price approaching 100-day or 200-day SMA
- Free cash flow stable or growing
- Valuation at or below 5-year average
Agent scoring
RSI is part of the 20-point Bollinger / RSI oversold category. Combined with pullback (20 pts), MA support (15 pts), fundamentals (20 pts), and valuation (15 pts), it forms a complete signal.
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