Overbought Oversold
Technical Analysis
Definition
Market conditions where securities have moved too far in one direction relative to their fundamental value or technical indicators, suggesting potential for mean reversion or price correction.
Key Points
- Overbought suggests potential selling pressure
- Oversold indicates possible buying opportunity
- Extreme conditions can persist longer than expected
Examples
RSI above 80 signals overbought conditionRSI below 20 indicates oversold territoryQuick Info
Category
Technical Analysis
Related Topics
rsi indicator
mean reversion
extreme conditions
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