What are some examples to illustrate what "short-term oversold, long-term overbought" mean? Sounds contradictory.
I think it means that on the larger time frame the market is over heated... But on a smaller time frame the selling is over done... Basically saying we are due for a correction because of inflated asset prices but on a small time frame the selling was to accerated to be sustainable at that velocity
A good example would be if NFLX or AMZN dropped 25% tomorrow due to an analyst downgrade. Too hardcore of a drop in a short period of time but ultimately both stocks could be considered overbought on a larger timeframe.
well fundamental analysts always have some idea of what they think a fair price is based on everything except what the market is doing. So if the price goes below their fair value they claim it is oversold.