|Analyst Recommendation / Rating Change
Overbought stocks refer to those whose prices have risen too much and too quickly, and now are considered expensive relative to their intrinsic value. These stocks are typically characterized by a sharp and sustained upward trend in prices, often fueled by hype and speculation rather than fundamentals.
An overbought stock is indicated by a technical indicator called the Relative Strength Index (RSI). The RSI ranges from 0 to 100 and is used to gauge whether a stock is overbought or oversold. When the RSI value exceeds 70, the stock is considered overbought, indicating that the price has risen too high and is due for a correction.
Overbought stocks are often subject to a significant and sudden price reversal, which can result in substantial losses for investors who bought in at the peak. Therefore, it is important to be wary of buying stock when it is overbought, as it could be a sign that the stock is overvalued and due for a correction soon.
Investors should always be cautious when approaching overbought stocks and should avoid chasing the trend. Instead, you should focus on investing in companies that have strong fundamentals, solid earnings, and good growth prospects, irrespective of the trend. A wise approach is to study the stock's fundamentals and technical indicators to make an informed decision about whether or not to invest in the stock.
If a stock is overbought, it rises to the oscillator's upper zone and may encounter a sell-off. Overbought stocks and volume can be important indicators for traders to predict future of a stock price direction. The ability to read overbought and volume signals can be one of the handiest strategies for traders.
The overbought signals provided here are published daily before 9AM EST. They are listed with ticker symbol, company name, and overbought date. Click on view chart to view Volume, Average directional index, Stochastic oscillator, Aroon indicator, Exponential moving average (EMA), Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Standard deviation, and other technical indicators.