OVERBOUGHT

The overbought situation is a technical condition that occurs when prices are considered too high and susceptible to a decline. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely implies that a stock has risen too far too fast and might be due for a pullback.

In technical analysis, an overbought market is one in which the volume of buying that has occurred is greater than the fundamentals can justify. It is the opposite of oversold.