This is another simple yet effective indicator. It too indicates overbought conditions. Many trading strategies and based on the concept of reversion to the mean. If a stock is overbought it will draw sellers into the market. They will be expecting a reversal or move lower and selling could cause it to happen. This could be the case with shares of Builders FirstSource. Read Next: • Oil Prices Rally As Middle East Tensions Rise, Libya Warns Of Potential Production Halt: 10 Energy Stocks On The Move Monday Photo: Shutterstock