Stock of the Day: Do Overbought Conditions Mean Builders FirstSource Is About To Reverse?

Momentum refers to how far a stock's price has moved in a given time. For the most part, stocks stay within their average or typical range. If the price exceeds this range, the stock is considered to be overbought. Three popular momentum indicators on the following chart show that shares of Builders FirstSource, Inc. BLDR are overbought. This is why it's our Stock of the Day. It's important to know when a stock is overbought. These stocks tend to reverse and move lower. But traders need to exercise caution. ...