Investing in the stock market can be both thrilling and daunting, especially during times of market volatility like we’ve seen this week. The recent sell-off in the S & P 500 may have broken some winning streaks, but it also presents unique opportunities for investors looking to capitalize on potential rebounds.
At Extreme Investor Network, we believe in providing our readers with valuable insights and strategies to navigate the ever-changing landscape of the market. This week, all three major averages are on track for losses, with the S & P 500 and the Nasdaq Composite set to end their winning streaks. However, this doesn’t mean all hope is lost for investors.
One strategy to consider during times of market turmoil is to monitor overbought and oversold stocks as measured by their 14-day relative strength index (RSI). Stocks with a 14-day RSI below 30 are considered oversold, signaling a potential comeback, while those with a 14-day RSI above 70 are overbought and may be due for a pullback.
For example, tech giant Salesforce experienced a significant drop this week after disappointing earnings results. Despite this, many Wall Street analysts remain optimistic about the stock’s future prospects, with some forecasting a surge of more than 37%. On the flip side, biopharmaceutical company Bristol-Myers Squibb is another oversold stock to keep an eye on as it undergoes a cost-cutting initiative with potential upside of over 29%.
On the other hand, some of the most overbought stocks of the week include HP and Ralph Lauren, which saw significant gains driven by positive earnings reports. While these stocks may seem attractive, it’s important to exercise caution as their RSI levels suggest a potential pullback in the near future.
At Extreme Investor Network, we strive to provide our readers with actionable insights and analysis to help them make informed investment decisions. Stay informed and stay ahead of the curve with our unique content tailored to the savvy investor.