How to use technical analysis to spot overbought and oversold stocks

The idea behind this strategy is to book profit and take a fresh view.

Overbought and oversold conditions, categorised as such according to the position of a stock price / market level with respect to a certain threshold, can be a psychological trigger for traders to either enter or exit the security and even markets. The categorisation can be on the basis of either fundamental or technical analysis.

Fundamental Analysis

The basic idea of fundamental analysis is to determine the intrinsic or 'fair value' of a stock. In a fundamental study, the corporate / business development or similar incidences may lead to an enormous change in price, which investors may feel is either over/under