What Is Oversold? Meaning & Example
Definition
Oversold describes an asset whose price has fallen quickly and may be stretched below recent norms. Prices can keep falling even when oversold.
Related terms
Overbought describes an asset whose price has risen quickly and may be stretched above recent norms. It is a warning of possible pause, not a guarantee of a drop.
Technical AnalysisTechnical analysis studies price charts, volume and indicators to look for patterns and trends. It focuses on market behavior rather than company finances.
SupportSupport is a price area where buying interest has tended to stop declines. Traders watch support levels for potential bounces or breakdowns.
What is Oversold?
Oversold describes an asset whose price has fallen quickly and may be stretched below recent norms. Prices can keep falling even when oversold.
Can you give an example of Oversold?
An RSI reading below 30 is commonly labeled oversold.