According to Katie Stockton, founder and managing partner of Fairlead Strategies, investors should not buy even if they feel that selling on the stock market has gone too far. “We look for overbought signals in uptrending markets,” the top chart analyst said on CNBC’s “Squawk Box” Thursday. , but in falling markets like the one right now, an oversold reading really isn’t necessarily a good thing.” Stockton spoke as markets sold off fears the economy could slip into a recession following a strong interest rate hike by the Federal Reserve. On Thursday, the Dow Jones Industrial Average fell below 30,000 for the first time in more than a year, down about 700 points on the day. The S&P 500 and Nasdaq Composite fell 2.9% and 3.5%, respectively. Stockton says that indexes like the Cboe Volatility Index, or VIX, have yet to show that the stock is up due. The chartist noted that she is looking for the VIX to break through 38 for a speculative signal. That, according to Stockton, could bring the S&P 500 down to around 3,500 — or even lower. VIX trades above 31 on Thursday. “I think 3,500 is definitely enough to do that, just shake people’s confidence,” Stockton said. “But I find from a bottom-up perspective a lot of the names, especially on the high-growth front, are actually still above their May lows and I think that could give people feel safe, like, ‘Okay, we don’t have any new breakdowns going on, but there’s a lot of room for support.” Stockton also said those support levels are “very much looking forward to.” fragile” and can be discarded. If Wall Street sees two weekly closes below 3,815, the analyst said, the broad market index could fall further to 3,200 in the coming months. “So all of this… suggests there’s more of a risk,” she said.