from The American Heritage® Dictionary of the English Language, 4th Edition
- v. Past tense and past participle of overbuy.
- adj. Characterized by excessively high prices owing to prior heavy buying and a concomitant rise in prices: an overbought stock market.
from Wiktionary, Creative Commons Attribution/Share-Alike License
- adj. A stock or commodity market condition where there has been significant trading bidding up prices to higher levels, levels which seem overextended or excessive on a short-term basis.
Sorry, no etymologies found.
My inbox is filled with folks focusing on the short term overbought reading rather than the head and shoulders bottom or the Russell ...
" The recent pullback was constructive, in our view, because it relieved widespread short-term overbought conditions, " said Katie Stockton , chief market technician at MKM Partners.
" We view the pullback as healthy because it relieved widespread short-term overbought conditions without a loss of positive intermediate-term momentum, " said Katie Stockton , chief market technician at MKM Partners.
"We could see a pullback this week as the recent rally did bring short-term overbought conditions, but I don't think a pullback will retrace the entire rebound," Ms. Stockton said.
Wrapping it up, expect the market to move higher, but not without some struggle as short-term overbought conditions will likely add some drag to the day-to-day activity.
Against this backdrop, each benchmark is near-term overbought - the S&P has risen 4.7% across just three weeks - and a consolidation phase is overdue.
"This was a testament to the positive momentum behind the uptrend, which allowed long-term overbought conditions to be sustained for more than three years," Stockton said.
Several of these miners, as well as the Market Vectors Gold Miners ETF GDX, which has the above-named companies in its top holdings, may be short-term overbought.
Because of the steepness of the rally and the short-term overbought conditions, traders have to be aware of the possibility of a near-term correction especially since Friday's U.S. Non-Farm Payrolls report typically triggers a volatile two-sided reaction.
A further run-up to short-term overbought levels might invite shorting opportunity on vulnerable producers with ugly charts.
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