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Oversold
A price has fallen so hard in a short time that a rebound becomes more likely.
"Oversold" describes a situation in which a price has fallen faster and further than its usual movement. It is usually measured with indicators such as the RSI or Bollinger Bands.
The idea: after a sell-off, many sellers are already out and it takes little for the price to recover. That does not always hold. If a share falls for a good reason, such as a business that keeps shrinking, it can stay oversold. That is exactly what the traffic light is meant to detect.