Concept

RSI Range Rules

RSI Range Rules, also known as 50-midline regime, bull 40–90 / bear 10–60 range shift, are Momentum & Oscillators concepts. The Library holds 1 implementation — a working definition you can pull into Quant.

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The top custom implementation, built on the original standard RSI Range Rules formula.

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RSI Prediction by Range Segmentation preview

RSI Prediction by Range Segmentation

Indicator

What are RSI Range Rules?

RSI range rules formalize the observation that RSI does not use its 0-100 scale symmetrically: it shifts its operating range with the trend regime. In the formulation popularized by Constance Brown, building on Andrew Cardwell's work, bull-market RSI tends to travel roughly 40-90 and finds support in the 40-50 band on pullbacks, while bear-market RSI tends to hold roughly 10-60 with rallies capped in the 50-60 band. The classic 70/30 lines become regime-dependent: in a healthy uptrend, tagging 70 is normal strength and a true oversold print may never arrive.

The framework is usually credited to Andrew Cardwell, the RSI specialist whose courses for traders taught range analysis alongside the positive and negative reversal signals he identified. Constance Brown, who studied Cardwell's work, gave the ranges wide circulation in Technical Analysis for the Trading Professional (1999), arguing that oscillators rarely travel their full theoretical scale and instead operate inside regime-dependent bands. Her bull and bear ranges became standard RSI vocabulary, even where later authors quote slightly different boundaries.

The rule set has two working parts. First, read the regime from where RSI finds support and resistance, with the 50 midline as the coarse divider, the familiar centerline-regime idea upgraded to zones. Second, watch for range shifts: a bull-range market losing the 40 area, or a bear-range market reclaiming and holding above 60, is early evidence that the trend regime itself is changing.

Range rules answer the oldest complaint about RSI, that it stays overbought through entire uptrends and punishes anyone mechanically fading strength. Under the range reading, a sticky 70-plus RSI is information: it identifies the regime. The rules also reorder which signals deserve trust. In a bull range, bearish divergences against the 40-50 support zone fail often, while hidden divergence, closely related to Cardwell's positive and negative reversals, points with the regime and tends to age better. The zones are observed tendencies, valuable mostly because they force the regime question before any oscillator signal is taken.

How to identify the current RSI range regime

Use a 14-period RSI on a swing timeframe, daily or higher, with several months of swings in view.

  1. 1Mark the RSI peaks and troughs that line up with genuine price swings, not every wiggle.
  2. 2Read the troughs: pullbacks repeatedly bottoming in the 40-50 band argue a bull range; troughs stretching toward 20 argue a bear range.
  3. 3Read the peaks: rallies stalling in the 50-60 band fit a bear range; peaks pressing past 70 fit a bull range.
  4. 4If neither side is clean, classify the chart as rangebound and fall back to classic 70/30 readings until a regime asserts itself.
  5. 5Watch for the shift: a bull-range chart losing the 40 area, or a bear-range chart holding above 60, flags a possible regime change to confirm against price structure.

How it's calculated

Standard RSI read against regime-dependent operating ranges, where the zone that contains RSI identifies bull or bear conditions.

Gain⁡t=max⁡(Ct−Ct−1,0)\operatorname{Gain}_t = \max(C_t - C_{t-1}, 0)
Loss⁡t=max⁡(Ct−1−Ct,0)\operatorname{Loss}_t = \max(C_{t-1} - C_t, 0)
AvgGain⁡t=(n−1)×AvgGain⁡t−1+Gain⁡tn\operatorname{AvgGain}_t = \frac{(n - 1) \times \operatorname{AvgGain}_{t-1} + \operatorname{Gain}_t}{n}
AvgLoss⁡t=(n−1)×AvgLoss⁡t−1+Loss⁡tn\operatorname{AvgLoss}_t = \frac{(n - 1) \times \operatorname{AvgLoss}_{t-1} + \operatorname{Loss}_t}{n}
RSI⁡t=100−1001+AvgGain⁡t/AvgLoss⁡t\operatorname{RSI}_t = 100 - \frac{100}{1 + \operatorname{AvgGain}_t / \operatorname{AvgLoss}_t}
Bull range: 40≤RSI⁡t≤90, with the 40 to 50 zone acting as pullback support\text{Bull range: } 40 \leq \operatorname{RSI}_t \leq 90, \text{ with the 40 to 50 zone acting as pullback support}
Bear range: 10≤RSI⁡t≤60, with the 50 to 60 zone acting as rally resistance\text{Bear range: } 10 \leq \operatorname{RSI}_t \leq 60, \text{ with the 50 to 60 zone acting as rally resistance}
Midline: RSI⁡t>50 exactly when AvgGain⁡t>AvgLoss⁡t, so 50 separates net-gain from net-loss conditions\text{Midline: } \operatorname{RSI}_t > 50 \text{ exactly when } \operatorname{AvgGain}_t > \operatorname{AvgLoss}_t, \text{ so 50 separates net-gain from net-loss conditions}
RSI_t: Relative Strength Index at bar t
C_t: close price at bar t
Gain_t: upward close-to-close change at bar t, 0 on a down bar
Loss_t: downward close-to-close change at bar t as a positive number, 0 on an up bar
AvgGain_t: Wilder-smoothed average gain over the lookback
AvgLoss_t: Wilder-smoothed average loss over the lookback
n: RSI lookback period (commonly 14)
t: bar index

The 40 to 90 and 10 to 60 ranges follow Constance Brown's Technical Analysis for the Trading Professional and are empirical guides, not exact constants.

A regime shift is suggested when RSI breaks and then holds outside the range that previously contained it.

The rules assume Wilder smoothing; SMA or EMA based RSI variants shift the effective band levels slightly.

How traders use it

  • As a trend filter: take longs only while RSI keeps respecting the bull range and shorts only in the bear range, which keeps a mean-reversion oscillator from arguing with the trend.
  • As a pullback map: in an established uptrend, RSI dipping into 40-50 marks the zone where bull-regime pullbacks tend to stabilize, a place to hunt entries alongside price structure rather than fear a reversal; nothing about the zone is guaranteed.
  • As a regime-change alarm: a decisive break of the established range is treated as earlier evidence of trend change than price alone; the surrounding Constance Brown RSI studies build a larger toolkit on this idea.
  • As a divergence filter: regime placement decides which signals deserve trust, with counter-regime divergences demanding price confirmation and pro-regime continuation reads given more benefit of the doubt.
  • As a portable template: similar zone logic is applied to the stochastic oscillator, and adaptive RSI variants automate the band shifts that Brown's rules ask the analyst to judge by eye.

RSI Range Rules vs related frameworks

Overbought/oversold: The classic read treats 70/30 as reversal zones everywhere. Range rules make those levels conditional: 70-plus is routine in a bull range and rare in a bear range. One framework fades extremes; the other uses where extremes sit to define the trend.

Hidden Divergence: Cardwell's positive and negative reversals map closely onto hidden divergence and fire as single events; range rules describe the standing regime around those events. They grew from the same body of RSI work and are usually applied together.

Adaptive/dynamic RSI: Adaptive variants move the indicator's bands with volatility so the chart adjusts for you. Range rules keep the fixed 0-100 scale and move the interpretation instead. Same goal, opposite division of labor.

Concept family

Momentum & Oscillators

91 concepts mapped · 91 in the Library

RSI Range Rules FAQ

What RSI range indicates a bull market?

In Constance Brown's formulation, bull-market RSI tends to travel roughly between 40 and 90, with the 40-50 band catching pullbacks; bear-market RSI tends to hold roughly 10 to 60, with the 50-60 band capping rallies. The boundaries are tendencies, not hard lines: the informative events are whether those support and resistance zones keep being respected, and when they finally fail.

Do the 70/30 levels still matter under range rules?

They get reinterpreted rather than discarded. In a bull regime, RSI above 70 is normal trend strength, not an automatic sell, and a classic oversold print may never appear; in a bear regime the mirror holds. Many traders keep 70/30 as fade levels only in sideways markets and switch to the range-rule zones once a trend regime is established.

Who developed RSI range rules?

Andrew Cardwell developed and taught the range concept in his RSI coursework, and Constance Brown popularized it in Technical Analysis for the Trading Professional (1999). Wilder's original 1978 presentation used fixed 70/30 lines; the regime-dependent ranges are a later refinement of how his oscillator behaves inside trends.

What signals a shift from a bull range to a bear range?

RSI doing what the bull regime says it should not: a pullback slicing through the 40 area rather than holding 40-50, followed by a rally that stalls near 55-60 instead of pressing toward the 70s. The broken floor plus the capped bounce is the classic sequence, confirmed when price structure gives way too.

Do RSI range rules work on intraday charts?

The underlying behavior, RSI riding high in uptrends and low in downtrends, appears on any timeframe, but the zones were described on daily and weekly charts, and intraday regimes flip much faster. Most intraday users read the regime from a higher timeframe and execute on the lower one rather than reclassifying every few hours.

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