At Extreme Investor Network, we understand the importance of identifying overbought and oversold stocks in order to make informed investment decisions. As the S & P 500 continues to climb towards its all-time high, it’s crucial to recognize which stocks may be due for a pullback.
One of the most effective tools for determining overbought and oversold stocks is the 14-day relative strength index (RSI). Stocks with a 14-day RSI score above 70 are typically considered overbought, signaling a potential pullback, while those with an RSI below 30 are considered oversold and may be poised for a rebound.
This week, some of the most overbought stocks include retail giant Walmart, with an RSI reading of 81.7. Despite analysts’ bullish outlook on the stock, the consensus price target is only 1% above its current level, indicating a possible pullback. Walmart has seen a substantial year-to-date gain of 53%, hitting a new all-time high this week.
Clorox is another standout company on the list, boasting an RSI of 78.8 after a 25% surge in the past three months. Analyst sentiment on Clorox is more mixed, with most rating it a hold and the average price target nearly 10% below its current price. Similarly, Kenvue, a consumer health-care company spun off from Johnson & Johnson, is also overbought with an RSI of 78.6. Analysts predict a 5% decline in its stock price over the next year, despite a 29% increase in the past three months.
In contrast, let’s delve into some of this week’s most oversold stocks. Oil companies have taken a hit, with Halliburton and APA showing 14-day RSI readings of 22.5 and 23.9, respectively. Despite this, analysts anticipate a potential rally of nearly 60% for both stocks. Occidental Petroleum, with an RSI reading of 24.4, also has a price target 38% above its current level.
Lastly, pharmaceutical company Moderna has been downgraded to underweight, leading to a 7.4% decline this week and a 32% drop year-to-date. However, analysts see a potential 76% upside for Moderna shares, indicating an opportunity for a rebound.
At Extreme Investor Network, we provide unique insights on overbought and oversold stocks to help you navigate the ever-changing stock market landscape. Stay ahead of the curve with our in-depth analysis and expert recommendations.