TA Challenge: Relative Strength Index

In $Metech Intl (V3M.SG)$'s chart above, it is considered overbought when RSI = 70 and oversold when RSI = 30. Generally, you would expect trend reversals at these levels and sell when overbought and buy when oversold. But in Oct 2021, the price continued to rise until RSI = 95%. And in Jan 2022, the price continued to fall until RSI = 3%. In strong uptrends and downtrends, the 70 and 30 values may be exceeded. Overbought can be even "more overbought" and oversold can be even "more oversold". So don't buy a stock when RSI = 30 and don't short when RSI = 70. RSI has to be combined with other technical indicators to determine buy and sell levels. I will discuss this later.
Lagging or leading indicator?
In its absolute sense, it's a lagging indicator, because the price has to move first for the indicator to start moving in that direction. It basically moves with the price with a slight delay.
It can also be a leading indicator. When the RSI reaches extreme levels, it can signal that the price is overextended and may soon reverse in the other direction. Divergence can also transform the RSI into a leading indicator, providing insight on when trends may be running out of steam and are ready to reverse. This will be discussed below.
Divergences
Divergences signal a potential reversal because directional momentum does not confirm price. A bullish divergence occurs when a stock's price makes a lower low and RSI forms a higher low. RSI doesn't confirm the lower low and this shows strengthening momentum. A bearish divergence forms when the price records a higher high and RSI forms a lower high. RSI doesn't confirm the new high and this shows weakening momentum.

Fig. 2 shows $SamuderaShipping (S56.SG)$ with a bearish divergence in Mar- Apr 2022. It rose to new highs, but RSI formed lower highs for the bearish divergence. The subsequent breakdown in late Apr confirmed weakening momentum.
It must be noted that divergences are misleading in a strong trend. A strong uptrend can show several bearish divergences before a top actually materialises. Conversely, bullish divergences can appear in a strong downtrend and yet the downtrend continues. The chart above showed 3 bearish divergences in an uptrend before the trend reversed.
Failure swings
Failure swings are considered as strong indicators of an impending reversal. Failure swings are independent of price action, focusing solely on RSI for signals and ignoring divergences.

In $IFAST (AIY.SG)$'s chart above in Mar 2022, a bullish failure swing formed when RSI moved below 30 (oversold), bounced above 30, pulled back, held above 30 and then broke its prior high. It's a move to oversold levels and then a higher low above oversold levels.
A bearish failure swing forms when RSI moves above 70, pulls back, bounces up, fails to exceed 70 and then breaks its prior low.
RSI and other indicators
A trend does not reverse at exactly 30 and 70 levels. Hence, it is beneficial to use with other indicators to get confirmation of trade signals.

In $RH PetroGas (T13.SG)$'s chart above, RSI is used with Bollinger Bands and MACD to get confirmation of trade signals. In Mar 2022, the price rose above the upper Bollinger Band and RSI rose above 70. The RSI continued to rise until around 92. It was grossly overbought at this level. The next day, the price fell below the upper band with a bearish candlestick. A sell signal was triggered. The downtrend was confirmed a few days later when the MACD showed a bearish crossover.