What is what does it mean when a stock is oversold?

When a stock is oversold, it means that the stock price has dropped too much and too quickly and is now at a very low level. This can be due to various reasons such as an economic downturn, negative news about the company, or a general market trend. As a result, many investors might be selling off their shares which leads to supply outstripping demand and can further depress the stock price.

However, when a stock is oversold it is often viewed as a potential buying opportunity for investors who believe that the stock is undervalued. This can lead to a rebound in the stock price, as more buyers enter the market and start purchasing shares which can push the price upwards. It is important to keep in mind that just because a stock is oversold doesn’t necessarily mean it will immediately rebound, so investors should evaluate the underlying fundamentals of the company before making any investment decisions.