Sell Signal

What is a '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.