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Used in the context of general equities. Technically too low in price, and hence a technical correction is expected. Antithesis of overbought.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


In technical analysis, describing a security with too low a price. This means that the technical indicators on the security do not justify its current price. Technical analysts may recommend buying oversold securities, as they are due for a price correction. See also: Overbought.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


Of, relating to, or being a stock market that has declined rapidly and steeply in the recent past and is likely to exhibit short-term price increases in the near future. Determining whether a market is oversold is difficult and is subject to individual interpretation.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


A stock, a market sector, or an entire market may be described as oversold if it suddenly drops sharply in price, despite the fact that the country's economic outlook remains positive.

For technical analysts, an oversold market is poised for a price rise, since there would be few sellers left to push the price down further.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
There is a line between selling and over-selling science.
If both these countries begin to look East, as it is expected, then on this count too President Obama is over-selling the relationship.
Markets have always been prone to overbuying or over-selling with little or no rationale for either.
The slowdown is seen as a result of tougher demands from banks and pressure on debt management firms to "clean up their act" amid allegations of over-selling.
Last week the Sunday Mirror exposed one company for over-selling solar heating panels.
He points to the current recession in the U.S., due partly to the burst of the internet "bubble," as a result of the over-selling of the web.
Panel member Michael Gazzaniga, Ph.D., suggested that the council look at the issue of over-selling medicine in American culture.
It has become the focus of harsh criticism from analysts, who point to an 'unfocused' marketing strategy and the over-selling of the capabilities of its end-to-end systems management portfolio, and from customers, dissatisfied with its support capabilities.
In fact, one major manufacturer divulged that it had to reeducate its sales representatives against "over-selling" the benefits of powder-coated wood out of concern that the finish will not meet the durability standard of solid wood or high-pressure laminate work surfaces.