The irrigation surface of olive orchards has increased over recent decades. In zones affected, deficit irrigation scheduling is a must. The aim of this work was to study water stress management based on reference equations for midday stem water potential. An experiment was conducted over three seasons in Seville (Spain) from 2020 to 2022. A young hedgerow olive orchard (cv Manzanilla de Sevilla) was irrigated using three different treatments: Control (full irrigated), RDI, and Rainfed, in a completely randomized design (six replications). The midday stem water potential and leaf conductance were measured throughout the three seasons. Stem water potential was more sensitive to water stress than leaf conductance and showed a clearer impact and rehydration. Individual data of stem water potential were grouped according to leaf conductance reduction. The relationship of these stem water potentials and temperature or vapor pressure deficit was significant, linear, and aligned to published baselines. Scattering in these equations increased when the leaf conductance reduction was greater. These reference equations would be useful to define moderate water stress conditions in the most sensitive processes, such as vegetative or fruit growth. Definition of severe water stress conditions would be better established with constant values.