The first blue arrow indicates the end of the oversold position of the issue.
When it is used as an oscillator, a positive value indicates an overbought market while a negative value indicates an oversold market.
In our last publicly posted research note we made the case for a sharp rally in crude oil off the $40 lows on the grounds that it was oversold relative to the price of gold and that traders were overly bearish.
In any extreme situation investors forget to be selective, and this is common to overbought and oversold markets.
As for the future, it would not be surprising if markets in both America and Europe were to see a technical bounce from what is showing up on many charts as oversold positions.
For relative strength, determining the true value of an oscillator depends on the understanding of overbought or oversold positions.
Hong Kong shares rebounded marginally, snapping a three-day losing streak as bargain hunters bought into oversold bluechips.
Chinese share prices closed 0.43 percent higher as interest in oversold auto and software companies helped lift the market to a modestly positive finish after Thursday's losses, dealers said.
Now may be the time to rake in some oversold blue chips.
If the index is greater than the oversold level specified by the oversold input, a buying opportunity may be near.