RSI Ranges and Range Shifts explained

 

When J.Welles Wilder introduced RSI about five decades ago, he was largely focussed on 30, 70 levels as oversold and overbought. The 30 level was thought to be a floor from which RSI and price would rebound and 70 was thought to be ceiling from where the RSI and price would plummet. This might be true for a range bound market but not for a trending market.

In a trending market, RSI can remain overbought or oversold for extended periods while price continues to make newer highs or newer lows. This phenomenon is called momentum stickiness.

Furthermore, in a trending market, the oversold and overbought levels shift higher or lower. For example, in a bull market, the RSI almost never returns to the oversold 30 levels, rather it would bounce off from 40 to 50. This new level of 40-50 now becomes the new oversold region in a bullish trend.

Similarly, in a bear market, RSI seldom touches the oversold area of 70. The RSI rebounds from 60 level instead. This level now works as the new overbought level in a bear market.

This phenomenon was demonstrated by Andrew Cardwell.

Cardwell proposed that based on momentum and trend, RSI operates between some defined ranges and an RSI shift from one range to another can be an early signal of momentum or trend change. Let's understand this concept of RSI range and range shift in detail.

What is RSI range?

As stated earlier, Cardwell suggested that RSI operates within some defined territories during different market conditions. For example, in a bull market, the RSI oscillates between 40-80+ range and in bear market ceiling comes down to 60 from 80.

Based on his observations, Cardwell proposed three RSI ranges-

Bullish Range: 40-80+. In a confirmed bull market (uptrend) the RSI makes a new floor of 40.Instead of oscillating between 30-70 the RSI shifts into an upward range of 40-80.

Consolidation range: 40-60. When a stock consolidates, RSI swings between levels 40 and 60.

Bearish Range: 20 -60. In a confirmed downtrend, RSI doesn't reach the upper territory. The 60 level becomes the new ceiling instead, which acts as a new overbought level.

Let's see these ranges with the help of a couple of charts.

While Cardwell, proposed three RSI ranges as described above, later on, many analysts expanded upon this idea and proposed five RSI ranges. They are-

Super bullish Range- > 70

Bullish range- 40- 70

Sideways range- 40-60

Bearish range- 30-60

Super bearish range- below 30

This is shown in the image below.

Now that you have a fair understanding of RSI ranges, let's dive deeper and know about the RSI range shifts.

What is RSI range shift and how to use it?

One of the most valuable aspects of the RSI range theory is range shifts. A range shift occurs when RSI changes or crosses over from one range to another. This frequently predicts a trend reversal before the price action starts to change. For example, RSI crossing over to above 70 from the bearish zone signals a trend change from a downtrend to an uptrend.

Understand this through the chart below.

In the chart above, the stock was in a bear trend initially,and turns into an uptrend subsequently. Notice that as the trend changes the RSI range shifts from the lower domain of 20-60 to a higher domain of 40-80+. This is range shift.

As the range shifts, a trader should be ready to grab an opportunity to take a trade in the direction of the upcoming trend.

The Bottom Line

RSI should not be viewed as a rigid overbought–oversold indicator fixed at 30 and 70. As Andrew Cardwell highlighted, RSI is a dynamic momentum tool that adapts to the underlying trend.

 In strong trends, RSI operates within shifted ranges rather than reverting to traditional levels. 

By identifying whether RSI is moving within a bullish, bearish, or consolidation range—and more importantly, spotting when it shifts from one range to another—you can gain early insight into changes in market momentum and trend direction. 

When used alongside price action and trend analysis, RSI range and range shifts can significantly improve trade timing and help traders align themselves with the dominant market force instead of fighting it.