About 72% of Nifty50 stocks are either nearing or in the overbought region, with IT, Auto and Banks being the top 3 sectors by weightage in Nifty that are overbought. However, overbought signals seldom signal a reversal in a trending market, as much as they do in a sideways market. Further, despite Friday’s sharp fall in Nifty, the broader market has not been troubled as much, with only 38% of NSE500 stocks slipping below Thursday’s low, suggesting that a sell-off may be ruled out.