Sell Signal


DEFINITION of 'Sell Signal'

An event or condition that alerts investors to dispose of a particular investment. Sell signals may be observed by attentive analysts and investors with a good understanding of the stock market, while some investors prefer to rely on trading software or charts to tell them when to sell.

Some investors tend to simply follow the crowd, selling when everyone else thinks they see a sell signal.


A poorly performing market may appear to be an obvious sell signal, but many contrarian investors see this as a strong buy signal as long as the companies underlying the stocks are still fundamentally sound. Purchasing undervalued stocks when they are selling at a "discount" like this has helped many investors achieve excellent returns.

  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Buy Signal

    An event or condition that alerts investors to purchase a particular ...
  3. Trade Signal

    A sign, usually based on technical indicators, that it is a good ...
  4. Bear Market Rally

    A period in which prices of stocks increase during a bear market. ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Bear Market

    A market condition in which the prices of securities are falling, ...
Related Articles
  1. Active Trading

    Trading Without Noise

    False signals can drown out underlying trends. Find out how to tone them down and tune them out.
  2. Investing Basics

    What Are A Stock's "Fundamentals"?

    The investing world loves to talk about fundamentals, but do you know what it means?
  3. Fundamental Analysis

    Become Your Own Stock Analyst

    Learn how to do your own stock analysis and become a wiser investor.
  4. Active Trading

    Qualitative Analysis: What Makes A Company Great?

    To understand the qualities that make for a great company, investors must dig deep into "soft" metrics.
  5. Trading Strategies

    When Is A Bull Market Not A Bull Market?

    During some bull or bear moves in the stock markets, investors will be going with the trend, but day traders may find they cannot.
  6. Trading Strategies

    Can You "Learn" The Stock Market?

    All of the knowledge in the world won't ensure the perfect trade every time - but is it possible to improve your odds in the market?
  7. Investing Basics

    3 Key Signs Of A Market Top

    When stocks rise or fall, the financial fate of investors change, as well. There are certain signs that can reveal a stock’s course, and investors don’t need to be experts to spot them.
  8. Chart Advisor

    ChartAdvisor for October 2 2015

    Weekly technical summary of the major U.S. indexes.
  9. Investing

    How Diversifying Can Help You Manage Market Mayhem

    The recent market volatility, while not unexpected, has certainly been hard for any investor to digest.
  10. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  1. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  2. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  3. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  4. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  5. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  6. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!