Chart of the Day - Tuesday, December 8th, 2020

Today’s Chart of the Day was shared on Twitter by Sarah Ponczek of Bloomberg (@SarahPonczek). It's a daily bar chart of the Nasdaq 100 over the past year. The Nasdaq closed higher for the 10th consecutive day today, marking the longest winning streak in a year. As Sarah points out, RSI  just reached overbought territory (above 70) for the first time since September. Overbought might sound bearish, but it simply means that there is an overwhelming amount of buyers. RSI can stay overbought for long periods of time while price moves higher. Take a look at the period between June and September. RSI didn't even fall below 50, and the market moved significantly higher. The more important takeaway here is that RSI refuses to reach oversold conditions (below 30). The fact that we haven't seen RSI reach oversold conditions since March is evidence of a strong and healthy uptrend.