Oversold / Overbought

Oversold and overbought describe when a stock's price has moved to an extreme in one direction, based on momentum indicators like the RSI (Relative Strength Index). Oversold means the price has dropped so far that it may be due for a bounce back up; overbought means it's risen so far that a pullback might be coming. You'll see these terms in technical analysis—the study of price patterns and trading volume. They matter because they can signal potential turning points, though they're not guarantees. For example, if TechCorp stock gets hammered down and hits oversold levels, some traders see it as a bargain opportunity, while others wait for confirmation before buying.