overbought

Overbought

A technical analysis term describing a situation where a security has risen to such a price, usually on high volume, that an oscillator has reached its upper bound.

Notes:

Technicians will suggest that a security that is overbought is at levels not technically justified and will resultantly be sold off and the price of the security will decrease.

An overbought security is the opposite of one that is "oversold".

See also: Bubble, Oscillator, Oversold, Technical Analysis, Technically Strong Market, Technically Weak Market, Undervalued, Volume, Watered Stock

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Overbought

Used in the context of general equities. Technically too high in price, and hence a technical correction is expected. See: Heavy. Antithesis of oversold.

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overbought

Of, relating to, or being a stock market that has risen very rapidly in the recent past and is likely to suffer short-term price declines in the near future. Determining whether a market is overbought is difficult and is subject to individual interpretation.