- overbought
- A technician's term to describe a market in which the price has risen relatively quickly-too quickly to be justified by the underlying fundamental factors. The CENTER ONLINE Futures Glossary————Used in the context of general equities. Technically too high in price, and hence a technical correction is expected. Bloomberg Financial Dictionary————A technical opinion of a market which has risen too high in relation to underlying fundamental factors. Chicago Mercantile Exchange Glossary————A term describing a market (or a particular security), which is at an artificially high price level due to excessive buying. When a market (or security) is believed to be overbought, it is also believed to be due for a downward correction. On the other hand, when a market (or security) is believed to be oversold, it is believed that there has been excessive selling and the price is due for an upward correction. London Stock Exchange Glossary
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overbought o‧ver‧bought [ˌəʊvəˈbɔːt ǁ ˌoʊvərˈbɒːt] adjectiveFINANCE if a financial market is overbought, prices are higher than many people think they should be, and will probably come down:• He thinks the gold market is overbought and there will be a correction in two to three months.
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When prices have risen more than they should according to fundamental factors. This could mean the market is liable to a downward correction. In technical analysis, an instrument is overbought when it registers more than 75 percent on its RSI. The opposite of oversold.* * *
overbought UK US /ˌəʊvəˈbɔːt/ adjective► FINANCE used to describe financial markets, shares, etc. where prices have risen too far in relation to their real value: »Investors remain worried about valuations and claims that the market is overbought.
Financial and business terms. 2012.
