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Overbought / oversold

Descriptions of an indicator at an extreme: overbought after a big rise, oversold after a big fall.

Technical AnalysisBeginner

Definition

With RSI, readings above 70 are called overbought and below 30 oversold. These are statements about recent momentum, not predictions of a turn.

Watch out for

In a strong trend an indicator can stay overbought for weeks. Calling a top just because RSI is high is a common mistake.

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