What is Overbought / oversold?
Descriptions of a one-sided move (RSI above 70 or below 30), not predictions of a reversal.
Overbought means buying has dominated recently. It does not mean 'about to fall' — strong markets stay overbought for long stretches.
The useful version of the idea is context: an overbought pullback inside an uptrend behaves very differently from one inside a downtrend.
Related terms
- RSI (Relative Strength Index)Technical analysis
A 0–100 momentum oscillator; above 70 is called overbought, below 30 oversold.
- MomentumTechnical analysis
The speed of recent price change; strong momentum tends to persist over short horizons.
- TrendTechnical analysis
A persistent direction in price — higher highs and higher lows, or the reverse.