A condition where an asset's price has fallen too quickly and may be due for a bounce. Indicated by RSI below 30 or similar oscillator readings.
Technical analysis traders rely on Oversold to read price action objectively. Knowing exactly what it signals — and what it does not — separates disciplined chart readers from gut-feel traders.
RSI dropping to 18 signaled extreme oversold conditions, and the stock bounced 8% over the next two days.
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