The market is considered to be overbought and subject to a negative correction when more than
A) 60% of the stocks are selling above their 90 day average.
B) 70% of the stocks are selling above their 100 day average.
C) 80% of the stocks are selling above their 200 day average.
D) 70% of the stocks are selling above their 150 day average.
E) 90% of the stocks are selling above their 150 day average.

Question

Quizplus · Accepted Answer

When 80% of the stocks are selling above their 200 day average, it indicates that the market is overbought and a negative correction is likely to occur. This is because such a high percentage indicates a potential imbalance in the market, where the demand for stocks is greater than the supply, leading to a potential decrease in prices. The other options do not indicate as strong of a signal of an overbought market.

The Market Is Considered to Be Overbought and Subject to a Negative