Which condition indicates that the market is potentially oversold according to RSI?

The Relative Strength Index (RSI) is a popular momentum oscillator used in technical analysis to measure the speed and change of price movements. It ranges from 0 to 100 and is typically used to identify overbought or oversold conditions in a market.

An RSI reading below 30 indicates that the market is potentially oversold. This suggests that the stock has been sold off dramatically and may be undervalued, or could be due for a price rebound. Traders often view this as a potential buying opportunity, as it may imply that the selling pressure has reached an extreme level.

On the other hand, an RSI reading above 70 usually indicates an overbought condition, suggesting that the asset may be overvalued and a price pullback could be imminent. An RSI at 50 is considered a neutral point, where there is no strong momentum in either direction. An RSI equal to 0 is an extreme case that would not typically occur under normal trading conditions, as it would imply a complete lack of price movement or value in the asset.

Thus, the indication that a market is potentially oversold is specifically associated with an RSI reading below 30.