The S&P 500 just logged another losing week. These stocks could be due for a bounce

Select S&P 500 Stocks May Offer Rebound Opportunities After Recent Market Decline

Think of the stock market like a busy playground — sometimes kids (stocks) get pushed down too far and need a break, while others might be climbing too high and could come back down soon. This week, some well-known stocks dropped a lot, while others shot up fast.

Why This Matters for Investors

When stocks get pushed down or climb too high, it can be a signal for investors to pay attention. These moves can show when it might be time to buy, sell, or wait. Understanding what’s happening helps you make smarter choices with your money and avoid getting caught in big swings.

The Bears: Oversold Stocks

  • Boeing: The airplane maker’s stock dropped over 5% this week and is down about 9% this year. Its relative strength index (RSI) hit 25 — well below the “oversold” line of 30. That means it’s been hit hard, mostly because fixing the 737 Max is taking longer than expected.
  • Bank of America: This big bank’s stock fell 8% after its CEO said investment banking fees could drop more than 10%. Its RSI is at 28, another “oversold” signal.
  • Wynn Resorts: This casino company is the most oversold of the week, with an RSI of just 17. The stock fell more than 5% and is down about 31% this year.
  • Other oversold names include Las Vegas Sands, Carrier Global, and TransDigm.

When stocks are oversold, it means they may have fallen too quickly and could bounce back soon, though it’s not guaranteed. According to Investopedia, oversold stocks sometimes recover as bargain hunters step in, but not always right away.

The Bulls: Overbought Stocks

  • Marathon Petroleum: This energy company shot up over 7% this week and hit a record high. Its RSI soared to 87 — way above the “overbought” level of 70. The jump came after oil prices rose because of trouble in the Middle East.
  • Marathon’s stock is up a jaw-dropping 161% this year, thanks to hotter global oil prices.
  • Other energy companies like Valero Energy and Phillips 66 are also considered “overbought.”

Overbought stocks have gone up really fast and might be due for a pullback. Historically, stocks with an RSI above 70 often cool off, as shown in a study by Nasdaq.

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What’s Driving These Moves?

  • Interest Rates: The Federal Reserve raised its main rate again, making it more expensive to borrow money. That usually puts pressure on stocks.
  • Bond Yields: The 10-year Treasury yield hit its highest level in 19 years. When bond yields go up, some investors move money out of stocks and into safer bonds.
  • Global Events: Oil prices spiked after a drone attack in Saudi Arabia, helping energy stocks but hurting others.

Big swings like these aren’t new. For example, the S&P 500 has had similar pullbacks before — in 2022, it fell more than 20% in a year but later recovered. Watching for oversold and overbought signals can help investors spot opportunities and risks.

Bull vs. Bear: Pros and Cons

  • Bullish (Positive) Side:
    • Oversold stocks may bounce back soon, offering a chance to buy at lower prices.
    • Energy stocks are soaring, giving investors in that sector big gains.
  • Bearish (Negative) Side:
    • Oversold stocks can stay low longer than expected if problems continue.
    • Overbought stocks could drop if the good news fades or oil prices fall.

Investor Takeaway

  • Check if stocks in your portfolio are oversold or overbought; use the RSI as one tool to help you decide what to do next.
  • Don’t rush to buy oversold stocks — make sure the company’s problems are fixable first.
  • Be careful with overbought energy stocks; think about taking some profits if you’ve had big gains.
  • Stay alert to news about interest rates, bond yields, and global events, as these can move the market quickly.
  • Remember, big swings happen — focus on your long-term plan and avoid making emotional decisions.

For the full original report, see CNBC

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