OVERSOLD

The oversold situation is a technical condition that occurs when prices are considered too low and ripe for a rally. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely implies that the security has fallen too far too fast and may be due for a reaction rally.

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