Overbought

Overbought describes a situation in which the price of a stock has risen to such a degree, usually on high volume, that an oscillator has reached its upper bound.

Overbought

Overbought describes a situation in which the price of a stock has risen to such a degree, usually on high volume, that an oscillator has reached its upper bound.

 


Overbought Interpretation

Oscillators are generally used to detect Overbought situations. Overbought is generally interpreted as a sign that the stock is becoming overvalued and may experience a pullback. This indicator is typically used in conjunction with other signals.

Example of overbought/oversold conditions using the Stocastic Oscillator



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