Tag Archives: overbought conditions
The Dow Jones Industrial Average has been in overbought territory since the first trading day of this month and for a total of 10 days, according to a popular technical analysis indicator. But usually overbought conditions occur along uptrends.
Technical analysis has been a major cause of trader failures along with account undercapitalization. Here we show briefly how untested technical analysis claims about overbought/overbought conditions have misled traders into unprofitable trading.
After reading recent articles in financial and social media, one may get the impression that prolonged overbought conditions in the stock market are a recent phenomenon, usually attributed to central bank manipulation and herd behavior. These are false impressions according to … Continue reading