Measured on US stocks since 1995, RSI(14) below 30 was followed by a slightly better week — 51.6% of such stocks beat the median stock — and above 70 by a slightly worse one (48.5%). It is a small mean-reversion tilt, not a forecast, and it fades by three months.

Does a MACD crossover predict returns?

Not in this data. On the day MACD crossed above its signal line, 49.3% of stocks beat the median stock over the next week — a faint lag, not an edge.

Do golden crosses work?

After a golden cross (the 50-day average crossing above the 200-day), 49.7% of stocks beat the median stock over the next month; after a death cross, 49.0%. Neither is a measurable edge.

Do breakouts to a new high keep going?

Not over the next week: a close at a new 10-day high was followed by 48.7% of stocks beating the median stock — slightly worse than chance.

What about Bollinger bands?

A close above the upper band was followed by 48.6% of stocks beating the median stock over the next week; a close below the lower band by 50.9%. Both point the same way as RSI: short-run reversal.

Study · RSI, MACD and indicators

Do RSI, MACD and other indicators predict returns?

Measured Sep 24, 2026 · outcomes through Aug 21, 2026

The short answer

Only weakly — and mostly the opposite way to how they are usually read. Over the next week, US stocks with RSI(14) below 30 beat the median stock 51.6% of the time and those above 70 only 48.5%; a close above the upper Bollinger band 48.6%, a new 10-day high 48.7%. That is short-run reversal, not momentum. MACD and golden crosses showed no reliable edge.

Oversold and overbought readings — the next week

How often a stock showing each reading beat the median stock on the same day over the next five trading sessions. The dashed line is chance (50). A filled square is a result that held up across the years (t-statistic at least 3); hollow means no measurable edge or only a faint one.

Oversold and overbought readings — the next week

Crosses, breakouts and trend readings — the next week

Signals built to follow a move — MACD crossing up, a new 10-day high, the Parabolic SAR turning up — were followed by slightly weaker weeks, not stronger ones. Golden and death crosses are rare and showed no reliable edge at any horizon.

Crosses, breakouts and trend readings — the next week

How the RSI tilt changes with the horizon

The tilts are clearest over about a week — the only horizon where both held up across the years — and are gone by three months. Overbought readings already lag over the next session; oversold ones take about a week to show.

How the RSI tilt changes with the horizon

Across the whole range, not only at the extremes

Split every US stock into fifths by each indicator, every week. Over the next week the highest fifth beat the median stock less often than the lowest fifth for every oscillator here — the same reversal as the zones above, across the whole range. Three-month momentum, by contrast, showed no measurable edge.

Across the whole range, not only at the extremes

How big is it?

Small. A stock with RSI(14) below 30 ended the next week 0.71 points above the median stock on average — a tilt across hundreds of names, and only a nudge for any one of them. Trading costs and the next day's gap can take all of it.

Short-term reversal: the relation underneath these readings

How this was measured

Every Wednesday since 1995, the stocks in our universe are compared on the signal and followed for 1, 5, 21 and 63 trading sessions. A reading counts when the stock beat the median stock on the same day, so chance is always 50 in 100 and a market-wide rally cannot flatter the result. The strength of a relation is a rank correlation (IC) between the signal and the forward return; its t-statistic is taken on non-overlapping dates, and a relation is called proven only when |t| is at least 3, it held in at least 60% of years and it is large enough to matter. With hundreds of tests, a looser bar would pass about one in twenty by luck. Studies run Sep 24, 2026; outcomes measured through Aug 21, 2026.

Research, not advice. A measured tendency across hundreds of stocks is a nudge for any one of them, never a forecast of its price.

Questions

Does RSI work?: Measured on US stocks since 1995, RSI(14) below 30 was followed by a slightly better week — 51.6% of such stocks beat the median stock — and above 70 by a slightly worse one (48.5%). It is a small mean-reversion tilt, not a forecast, and it fades by three months.
Does a MACD crossover predict returns?: Not in this data. On the day MACD crossed above its signal line, 49.3% of stocks beat the median stock over the next week — a faint lag, not an edge.
Do golden crosses work?: After a golden cross (the 50-day average crossing above the 200-day), 49.7% of stocks beat the median stock over the next month; after a death cross, 49.0%. Neither is a measurable edge.
Do breakouts to a new high keep going?: Not over the next week: a close at a new 10-day high was followed by 48.7% of stocks beating the median stock — slightly worse than chance.
What about Bollinger bands?: A close above the upper band was followed by 48.6% of stocks beating the median stock over the next week; a close below the lower band by 50.9%. Both point the same way as RSI: short-run reversal.

More evidence

Chart patternsDo chart patterns predict stock returns?Short-term reversalDo stocks that just jumped keep winning?Volume and liquidityDoes trading volume or liquidity predict stock returns?Short interestDoes short interest predict stock returns?Insiders and analystsDo insider buys or analyst revisions predict stock returns?Signals without an edgeWhich popular stock signals don't predict returns?

All studies

References

Brock, W., Lakonishok, J. and LeBaron, B. (1992). Simple Technical Trading Rules and the Stochastic Properties of Stock Returns. Journal of Finance 47(5).
Park, C.-H. and Irwin, S. H. (2007). What Do We Know About the Profitability of Technical Analysis? Journal of Economic Surveys 21(4).
Jegadeesh, N. (1990). Evidence of Predictable Behavior of Security Returns. Journal of Finance 45(3).