overhanging supply


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Market Overhang

Shares in a security or commodity contracts that are likely to be sold in certain circumstances, creating downward pressure on the price. That is, the market overhang supply is a block that investors are holding but will likely attempt to sell. For example, if a security hits its resistance level, more investors are likely to sell their shares which increases the number of shares available on the market and, assuming demand does not increase, will lead to a decline in the price. Market overhang is also called the overhanging supply or simply the overhang.

overhanging supply

A relatively large block of a security that may or will be sold under certain circumstances. For example, a large stockholder may announce a secondary offering of a security. Overhanging supply is of interest to technical analysts who consider a resistance level to be caused by unhappy investors who are determined to sell the security if it reaches a certain price. There is an overhanging supply of the security at the resistance level. Overhanging supply tends to be bearish for a security because investors feel the security will have difficulty rising in price.
References in periodicals archive ?
Bahrain's commercial real estate sector is witnessing stagnant growth as a dip in economic output and an overhanging supply of commercial space combine to keep rental rates down.
As for the Fed, it cannot monetize the entire overhanging supply of bad debt without self-destructing, which it is unwilling to do.
71 on July 18 reflected the uncertainty and element of overhanging supply inherent in the Company's registration of 1 million shares for potential sale, the stock's decline through technical support levels (which have seemed to play a significant role in the stock's trading), and a significant increase in shorting (as of July 12, the short position stood at 646,260 shares).