KDJ Overbought and Oversold Zones
Learn about the traditional KDJ overbought and oversold zones, and how they compare to the RSI thresholds covered in the previous unit.
- 7 min read
- For beginners
- Educational
- บทเรียนที่ 4 จาก 7
- 1KDJ Indicator Explained: A Beginner's Guide
- 2KDJ K, D and J Lines Explained: Formulas and Meaning
- 3KDJ Crossover Explained: Golden Cross and Death Cross
- 4KDJ Overbought and Oversold Zones
- 5KDJ Divergence: Comparing KDJ to Price
- 6KDJ in Ranging vs Trending Markets: An Important Nuance
- 7The Difference Between KDJ and the Stochastic Oscillator
This lesson explores the traditional overbought and oversold reference levels used with KDJ, building on the K, D and J line concepts from earlier in this unit.
The levels described in this lesson have been verified against multiple technical analysis education sources.
The Traditional KDJ Overbought and Oversold Levels
Readings above 80 are traditionally considered overbought, and readings below 20 are traditionally considered oversold, most commonly referenced in relation to the D line specifically, though sometimes discussed in relation to K and J as well. These thresholds are somewhat wider than the traditional RSI levels of 70/30 covered in the previous unit.
The J Line's Extended Range
As covered in the earlier lesson, the J line can extend beyond the standard 0–100 range that bounds K and D. Some technical analysis education discusses a J line reading above 100, or below 0, as reflecting a particularly extreme, amplified overbought or oversold condition, given the J line's role in exaggerating the gap between K and D.
Overbought and Oversold Do Not Guarantee Reversals
As with the RSI overbought/oversold concept covered in the previous unit, reaching these KDJ thresholds does not, by itself, guarantee that a reversal is imminent. This connects directly to the ranging versus trending markets lesson later in this unit, which explores how KDJ's high sensitivity can lead to these zones being reached frequently, including during conditions where a sustained reversal does not follow.
Comparing to RSI's Thresholds
The wider 80/20 KDJ thresholds, compared to RSI's 70/30, partly reflect KDJ's generally higher sensitivity (discussed further in the final lesson of this unit) — a narrower overbought/oversold range might otherwise be triggered too frequently given how responsively KDJ, particularly the J line, tends to move.
Summary
KDJ readings above 80 are traditionally considered overbought and below 20 oversold — wider thresholds than RSI's 70/30, partly reflecting KDJ's generally higher sensitivity — with the J line's ability to extend beyond 0–100 sometimes discussed as reflecting particularly extreme conditions. As with RSI, reaching these levels does not, by itself, guarantee a reversal is imminent.
Frequently Asked Questions
Readings above 80 are traditionally considered overbought, most commonly referenced in relation to the D line.
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