Charts & technicals

What is Overbought and oversold?

Also called: Overbought, Oversold

Hinglish mein padhein: Overbought aur oversold kya hota hai?

Overbought means a price has risen fast and may be due for a pause; oversold means it has fallen fast and may bounce. Both are measured with oscillators like RSI.

They describe speed, not value. An overbought stock can keep rising if the business news is strong.

Traders often wait for the oscillator to turn back before acting.

Related terms

RSI (Relative Strength Index)RSI is a momentum oscillator from 0 to 100 that compares recent gains with recent losses, usually over 14 periods.
MomentumMomentum is the tendency of stocks that have risen strongly to keep rising for a while (and fallers to keep falling).