Sell Signal

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Contrarian

    An investment style that goes against prevailing market trends ...
  6. Chartist

    An individual who uses charts or graphs of a security's historical ...
RELATED FAQS
  1. What's a good forex strategy to use when spotting a Wedge-shaped Pattern?

    Use wedge-shaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >>
  2. How does a company decide when it is going to split its stock?

    There are no set guidelines or requirements that determine when a company will split its stock. Often, companies that see ... Read Full Answer >>
  3. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>
  4. Why are some spin-offs taxable and some are tax-free?

    The manner in which a parent company structures the spinoff and divests itself of a subsidiary or division determines whether ... Read Full Answer >>
  5. Which has performed better historically, the stock market or real estate?

    For the majority of U.S. history – or at least as far back as reliable information goes – housing prices have increased only ... Read Full Answer >>
  6. What's the difference between cash-on-delivery differ and delivery against payment?

    Cash on delivery and delivery versus payment describe different procedures and timing of payments. Cash on delivery describes ... Read Full Answer >>
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. Technical Indicators

    Will These High-Flying Stocks Stay Hot in 2015?

    These 10 stocks were on fire in 2014. Will they stay hot?
  8. Investing

    The Case For Stocks Today

    Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking.
  9. Chart Advisor

    These REITs Are Looking Good Right Now

    These REITs are in strong uptrends and looking to go higher.
  10. Mutual Funds & ETFs

    Why You May Want To Be (And Stay) In Bonds

    Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center