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Definition

An indicator that attempts to define when prices have moved too far and too fast in either direction and thus are vulnerable to a reaction. The OB/OS indicator is calculated by expressing the gap between a price and its moving average as a percentage of the moving average. A large gap on the downside indicates an oversold position and vice versa.
<figure class="container-fluid"><img class="img-responsive" style="display: block; margin: 0 auto; max-width: 100%;" src="/onlinecourse/img/glossary/OBOS.jpg" alt="Overbought Oversold Indicator" />
<figcaption style="text-align: center;">An example of the Overbought Oversold Indicator</figcaption>
</figure>

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