Microsoft hit record high as Nasdaq secured an 8-day winning streak

Nasdaq Composite rose for eight consecutive days, with Microsoft standing out, surging 15% to a record high. Microsoft's share price outperformance was largely driven by recent strong quarterly earnings report. However, Microsoft's 14-day RSI reached 72, which is approaching extreme overbought status, indicating potential short-term risk signals.

How to interpret the RSI?

In terms of market analysis and trading signals, it is considered a bullish indicator when the RSI moves above the 30 reference level. Conversely, when the RSI falls below the 70 reference level is regarded as a bearish signal. Since some assets are more volatile and move faster than others, values of 80 and 20 are also commonly used for overbought and oversold assets.