The market continues to trend higher, with tech stocks leading the charge once again. Investor appetite for momentum and speculation has surged as major indices flirt with fresh all-time highs, and several individual names have ridden the wave to extended gains. However, as always, not every rally is built to last permanently, especially when technical indicators begin flashing warning signs.
The Relative Strength Index (RSI), a widely followed momentum gauge, is often used to help market participants spot when a stock may be due for a pullback. Readings above 70 are typically considered overbought, and when they stretch into the high 80s or 90s, it can signal that a near-term pullback is highly likely.
