Oscillator

It is a statistical tool that fluctuates around a horizontal middle line.  At times the oscillator is plotted at extreme high readings, recording an overbought market. Conversely, when the oscillator moves at extreme low readings below the middle line it is recording an oversold market.  Some oscillators are bounded i.e. they provide upper and lower boundaries which make overbought/oversold identification easy.  In the absence of upper and lower boundaries, a visual inspection will do the trick.