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Trading glossary · indicators

overbought

When price has climbed so hard and fast lately that the rise may need a rest.

The fuller meaning

An oscillator reading suggesting recent gains are stretched: RSI above 70 or the stochastic above 80. It describes the recent push, not a sell signal; in strong uptrends readings can stay overbought for a long time, so traders wait for a turn in price or the oscillator.

overbought.

Related words

61.8% level · ATR · ATR expansion · bearish divergence · Bollinger Bands · bullish divergence · crossover · %D · death cross · divergence