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What is overbought and oversold? What is their definition?
Overbuying refers to the rise of asset prices to a level that fundamental factors cannot support, usually after the price rises sharply in a short period of time. Overbuying means that the price is easy to be revised downwards; Oversold is a technical analysis term, which means that the price of securities may rise in the near future after falling sharply.

Oversold and oversold (OBOS) is an analytical tool to measure the overall trend. Calculate the sum of the number of stocks that rose in N days, and then calculate the sum of the number of stocks that fell in these days. After subtraction, the OBOS value is obtained. In the stock market, due to the spread of some news, investors reacted strongly to the market or individual stocks, which caused the stock market or individual stocks to rise or fall excessively, so the phenomenon of overbought and oversold appeared.

Extended data:

Technical analysis methods to measure overbought and oversold mainly include relative strength index (RSI), swing index (OCS), stochastics (KDJ) and percentage.

1, random

Stochastics integrated some advantages of momentum concept, strength index and moving average in his design. In the calculation process, he mainly studied the relationship between the price and the closing price, that is, by calculating the true amplitude of price fluctuations such as the highest price, the lowest price and the closing price on the same day or in recent days, to reflect the strong and weak trend of prices and the phenomenon of overbought and oversold.

2. Swing index

Is to calculate the ratio of the closing price of the day to the average closing price of "n" days. Oscillation is another form of momentum index, which is generally calculated as a percentage value. Its connotation is to divide the closing price of the day by the average closing price of n days and then multiply it by 100. Swing indicators give investors a signal to turn to overbought or oversold trends.

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Baidu encyclopedia-oversold

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