What the terms mean
Overbought and oversold describe momentum extremes — a stock that has moved very far, very fast in one direction. They're most often measured with RSI (70 / 30) but the idea applies to any momentum tool.
How to read them
- Overbought ≠ "sell" and oversold ≠ "buy". Strong trends routinely stay overbought for weeks.
- The signal is strongest when the extreme lines up with a level (support, resistance, the 200-day).
How we use it
We surface RSI on every ticker page with an overbought/oversold tag, and treat extremes as context for the setup rather than standalone triggers.