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Cookbooks · Signals: rules plus forecasts · Intermediate · about 8 min

RSI and Bollinger mean-reversion checks

Check whether a stock is stretched to the downside with RSI and Bollinger rules, then ask whether the next week leans toward a bounce.

1. When to use it

   "Oversold" is a fact about today; a bounce is a forecast. A mean-reversion entry wants both, and keeping them as separate answers stops a deep RSI from being read as a prediction.

2. The request

   {
     "model": "ora-fin1",
     "state": {
       "symbol": "AMZN"
     },
     "questions": {
       "oversold": {
         "type": "yes_no",
         "ask": "rsi(C,14) < 30"
       },
       "below_band": {
         "type": "yes_no",
         "ask": "C < bblower(C,20,2)"
       },
       "stretched": {
         "type": "yes_no",
         "ask": "rsi(C,14) < 35 or C < bblower(C,20,2)"
       },
       "oversold_en": {
         "type": "yes_no",
         "instructions": "Is its 14-day RSI below 30?"
       },
       "up_week": {
         "type": "yes_no",
         "instructions": "Will the stock be higher in a week?"
       },
       "drop5": {
         "type": "yes_no",
         "instructions": "Will it drop at least 5% at some point in the next month?"
       }
     }
   }

   Open this in the Playground

3. The real response

   AMZN:

   {
     "model": "ora-fin1",
     "answers": {
       "oversold": {
         "type": "yes_no",
         "yes_no": 0.1,
         "rule": "rsi(C,14) < 30",
         "basis": "rule"
       },
       "below_band": {
         "type": "yes_no",
         "yes_no": 0.5676,
         "rule": "C < bblower(C,20,2)",
         "basis": "rule"
       },
       "stretched": {
         "type": "yes_no",
         "yes_no": 0.5676,
         "rule": "rsi(C,14) < 35 or C < bblower(C,20,2)",
         "basis": "rule"
       },
       "oversold_en": {
         "type": "yes_no",
         "yes_no": 0.1,
         "rule": "rsi(C, 14) < 30",
         "basis": "comparison",
         "explain": "rsi < 30"
       },
       "up_week": {
         "type": "yes_no",
         "yes_no": 0.493
       },
       "drop5": {
         "type": "yes_no",
         "yes_no": 0.462
       }
     },
     "usage": {
       "input_tokens": 455,
       "output_tokens": 24
     },
     "context": {
       "source": "server",
       "symbol": "AMZN",
       "as_of": "2026-10-30"
     },
     "version": "ora-fin-0.1.1"
   }

   RSI is not oversold (oversold 0.1; the English version compiled to the same rule), but the close sits about on its lower Bollinger band (below_band 0.5676, near the line). or takes the higher part, so stretched is 0.5676. The forecast does not lean either way (up_week 0.493). For MSFT the band belief is 0.4578 and up_week 0.574.

4. The code

   cURLPythonJavaScriptPHPGoJavaC#RubyCopy

   Requires curl 7.76+. Save as run.sh, then: bash run.sh

   curl -sS https://oramodel.com/v1/systemone \
     -H "Authorization: Bearer $JEV_API_KEY" \
     -H "Content-Type: application/json" \
     -d '{
     "model": "ora-fin1",
     "state": {
       "symbol": "AMZN"
     },
     "questions": {
       "oversold": {
         "type": "yes_no",
         "ask": "rsi(C,14) < 30"
       },
       "below_band": {
         "type": "yes_no",
         "ask": "C < bblower(C,20,2)"
       },
       "stretched": {
         "type": "yes_no",
         "ask": "rsi(C,14) < 35 or C < bblower(C,20,2)"
       },
       "oversold_en": {
         "type": "yes_no",
         "instructions": "Is its 14-day RSI below 30?"
       },
       "up_week": {
         "type": "yes_no",
         "instructions": "Will the stock be higher in a week?"
       },
       "drop5": {
         "type": "yes_no",
         "instructions": "Will it drop at least 5% at some point in the next month?"
       }
     }
   }'

5. Act on it

   Require both a stretch and a lean before you treat it as a setup, and keep the rule's belief as a strength, not a switch:

   a = {k: v["yes_no"] for k, v in data["answers"].items()}
   if a["stretched"] >= 0.6 and a["up_week"] >= 0.55:
       add_to_reversion_list(symbol, strength=a["stretched"])
   elif a["stretched"] >= 0.6:
       note(symbol, "stretched, but no bounce lean in the forecast")

   On this session neither symbol clears both lines, so nothing is added.

6. Variations

   • Wider bands: C < bblower(C,20,2.5). A different oscillator: stochk(14) < 20.
   • An exit in the same request: rsi(C,14) > 50 or C > avg(C,20).
   • Ready-made pairs: Examples → Strategies → Mean Reversion.

Information, not investment advice. Every number on this page is a real response for the session shown; answers change with each session.

What's next

• Size positions by volatility regime