Overbought

Overbought is a technical analysis term describing a stock which has risen too far too fast.  Traders typically assume that there will be a correction in the stock price.  There are many formulas used to determine if a stock is overbought.  Most involve oscillators, such as the relative strength index.

This information is seldom used by itself.  Instead a trader will typically check that a stock is not overbought to confirm a buy signal.