The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.  The RSI the overbought or oversell zone is often seen by traders as a signal to buy or sell.

Advantages of RSI 

• Traders can use RSI to predict the price behavior of a security.
• It can help traders to predict the trends and trend reversals.
• It can point to overbought and oversold securities.
• It can provide short-term traders with buy and sell signals.
• It's a technical indicator that can be used with others to support trading strategies.

Overbought refers to a security that trades at a price level above its true (or intrinsic) value. That means that it's priced above where it should be. Therefore there in no  point in buying at that price, rather wait for the prices to fall.

The same idea applies to a security when it is oversold. It can be seen as trading at a lower price than it should. It signals one to buy the security.