What things indicate to you that a stock is "overbought"?

Answer 1

In Yahoo! Finance type in the stock's ticker. From the left-hand column choose "Technical Analysis." reset the chart to a 1- or 2-year price chart. Then select "Slow Stoch." This is the "stochastic oscillator" and it tracks the ratio of buys to sells. When it gets above 80% rayio of buyers to sells the stock is overbought. When it goes below 20% ratio of buyers to sellers, the stock is oversold.

This is a VERY short-term measurement, but more often than not I have found it can predict when the stock will turn in the short-run. I first decide whether to buy or sell a stock based on "fundamental" factors and then I choose when to buy or sell it using the stochastics.

Hope that helps!

Answer 2

There is research that shows that companies with a large short-interest are overvalued.