An asset is said to be oversold when its price has dropped significantly and there is a chance for the price to bounce. Being oversold doesn't guarantee a price rally will occur soon or at all since an oversold state might linger for quite some time. Oversold and overbought levels are identified by numerous technical indicators. These technical indicators base their evaluation on how the current price is moving in relation to earlier prices. Fundamental analysis can be used to determine whether an asset may have been oversold and has departed from its usual value measurements.
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