- (finance) A stock or commodity market condition where there has been significant trading bidding up prices to higher levels, levels which seem overextended or excessive on a short-term basis.
The term can be applied subjectively, or in technical analysis there are various different indicators which technical analysts may use for (more or less) objective identification of overbought conditions.
overbought - Investment & Finance Definition
A trading condition in which a stock or other financial instrument has had a quick run up in its price, making the price higher than it should be. A market with prices that are too high is said to be overbought, and the prices may decline in a correction. The opposite is oversold.