Overbought / Oversold indicator definition

Overbought / Oversold indicator is a tool used in technical analysis.

A person who says stock or market is Overbought thinks that the stock/market moved up too fast. He/she thinks that the stock/market is likely to decline. Overbought is basically a sell recommendation.

A person who says stock or market is Oversold thinks that the stock/market moved down too fast. He/she thinks that the stock/market is likely to go up. Oversold is basically a buy recommendation.

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