{"id":505,"date":"2005-09-01T23:10:34","date_gmt":"2005-09-02T04:10:34","guid":{"rendered":"http:\/\/selfinvestors.com\/tradingstocks\/mail-bag\/overboughtoversold-conditions-in-the-market\/"},"modified":"2018-08-12T01:18:34","modified_gmt":"2018-08-12T06:18:34","slug":"overboughtoversold-conditions-in-the-market","status":"publish","type":"post","link":"https:\/\/selfinvestors.com\/tradingstocks\/mail-bag\/overboughtoversold-conditions-in-the-market\/","title":{"rendered":"Overbought\/Oversold Conditions in the Market"},"content":{"rendered":"<p><strong>Question<\/strong>:<\/p>\n<p><font face=\"Arial\">Every now and then people mention caution in a market because of an overbought or oversold condition. I&#8217;ve never used this as another tool but have noticed that you have also referenced this indicator now and then. Which overbought\/oversold indicator do you use and how do you use it?<\/p>\n<p><strong>My Response<\/strong>:<\/font><\/p>\n<div><font face=\"Arial\" size=\"2\">Honestly I dont use anything but price, volume and support\/resistance levels when gauging the health of the market.&nbsp; I like to keep it as simple as possible.&nbsp; If you remember, I sent out an email to premium members at the end of July warning of an overbought condition.&nbsp; I was basing this just on previous resistance levels and the magnitude of the run (which nearly mirrored the length of the previous run from April to June &#8211; although the stochastics, which measures overbought\/oversold&nbsp;would have confirmed this as well).&nbsp; Investing can be complicated enough without having to track several different indicators.&nbsp; My feeling as that indicators such as stochastics (to determine overbought\/oversold conditions), MACD (to signal a change in trend), OBV, etc.is just another way of looking at the core components that make up a stock move (price and volume) and how it relates to its movement in the past.&nbsp;<\/font><\/div>\n<div><font face=\"Arial\" size=\"2\"><\/font>&nbsp;<\/div>\n<div><font face=\"Arial\" size=\"2\">That being said, these indicators can provide another visual picture of whats going and can confirm what you see in the chart.&nbsp; If interested in learning more about the most common indicators used by technical analysts there are some great free tutorials around from Stockcharts.com and Clearstation.com<\/font><\/div>\n<div><font face=\"Arial\" size=\"2\"><\/font>&nbsp;<\/div>\n<div><font face=\"Arial\" size=\"2\">http:\/\/stockcharts.com\/education\/IndicatorAnalysis\/index.html<br \/>\n<a href=\"http:\/\/clearstation.etrade.com\/education\/reading_graphs.shtml\">http:\/\/clearstation.etrade.com\/education\/reading_graphs.shtml<\/a><\/font><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Question: Every now and then people mention caution in a market because of an overbought or oversold condition. I&#8217;ve never used this as another tool but have noticed that you have also referenced this indicator now and then. Which overbought\/oversold indicator do you use and how do you use it? My Response: Honestly I dont &hellip; <a href=\"https:\/\/selfinvestors.com\/tradingstocks\/mail-bag\/overboughtoversold-conditions-in-the-market\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Overbought\/Oversold Conditions in the Market<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-505","post","type-post","status-publish","format-standard","hentry","category-mail-bag"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts\/505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/comments?post=505"}],"version-history":[{"count":0,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts\/505\/revisions"}],"wp:attachment":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/media?parent=505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/categories?post=505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/tags?post=505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}