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

Question

Quizplus · Accepted Answer

A market is considered overbought when a large majority of stocks are selling above their 200-day average. This is because it suggests that prices have risen too quickly and may not be sustainable, leading to a correction. The other answer choices are too low to indicate an overbought market.

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