Overbought / Oversold

When a stock's price gets higher than 1 standard deviation above its 50-day moving average, we consider it overbought.  Stocks lower than 1 standard deviation below its 50-day are considered oversold.  We use this indicator to follow timing on individual stocks as well as to track the number of overbought and oversold stocks on the S&P 500.  As of the close today, the number of oversold stocks is higher than the number of overbought stocks for the first time since October 28, 2005.

Below is a list of the most overbought and oversold stocks on the S&P 500 by this measure.

Comments

[bob]

where did you find that list of s&p 500 most overbought and oversold stocks?

thanks

[J Walters]

Bob,

We produce the list using the parameters described above.

Justin Walters

[Bob]

Thanks for the reply, going with your oversold stocks YHOO looks like a buy down here.

[Roger]

Justin,

This overbought/oversold chart is
incredible. Where/how can I sign
up/pay to see this chart updated on
a regular basis? Or learn how to
create it myself?

Thanks a lot,
Roger

[J Walters]

Roger,

We are glad you enjoy the chart. We provide plenty of overbought/oversold analysis with our Mini-Institutional service at www.birinyi.com. To create it yourself you will need historical daily closing prices of all the S&P 500 stocks. Once you have this, you will have to calculate the historical 50-day moving averages along with the standard deviation over the 50 days. As we said in the above post, a stock is overbought if it is greater than 1 standard deviation above its 50-day moving average.