Stock Oversold & Overbought Indicator

How to we know when a particular stock counters is oversold or overbought at that particular point of time?
The answer to the question is generally to look at the movement which measures the rate of change of the shares price of this counter over a certain time frame.

The two common indicators are Relative Strength Indicator(RSI) and Stochastic Indicator.

The RSI ususlly goes up and down from the value of 0 - 100.

When the line goes below 30,this indicates that the stock most probably is oversold.

If the line moves above 70, it means that the stock could be overbought.

The RSI is being measured over a specific time period of 14 days.

Stochastic Indicator is plotted with two lines moving up and down from the value of 20 - 80 .

There are two lines. One is known as '%K' and the 2nd line is known as '%D'.

A buy indication would be when this Stochastic both %K and %D drop below the value of 20 and then rises above that level.

Sell when this Stochastic indicator rises above the value of 80 and then falls below this level.

N.B.

(Invest at your own decision)