Overbought is the condition in which a stock is extended to the upside following an uptrend, and is due for some consolidation or retracement. Overbought readings may be found by using oscillators, or simply by seeing that a stock has moved too far up in too short of time. An overbought stock has made a price advance at an unsustainable rate.
Overbought is the opposite of oversold.
Anytime a stock or index becomes overbought, we highlight it for members of our stock pick service. Come trade with us!
Return to the chart patterns page to learn more terms.