Timing the market with RSI: what stats say.

Figure 1: RSI index of QQQ, a Nasdaq100 ETF (source: tradingview.com)

The Relative Strength Index (RSI) is one of the most popular technical indicators used by private investors. It consists of a momentum oscillator moving between two extremes values: 0 and 100.

An asset is considered overbought when the RSI is above 70 and oversold when the RSI is below 30. These simple rules are pretty attractive and one might find many examples of situations where RSI…