Welcome to Extreme Investor Network, where we provide you with valuable insights and analysis on the latest trends in the investing world. Today, we’re diving into the market metrics that indicate potential pullbacks for certain stocks.
The S & P 500 recently closed the week with a modest gain, but there are signs that some stocks might be due for a correction. AI darling Nvidia saw a 4% drop, sparking concerns about the tech-dominated market being overextended. To identify potential overbought and oversold stocks, CNBC Pro utilized the 14-day relative strength index (RSI) as a metric.
Microsoft, a tech giant benefiting from artificial intelligence, was flagged as one of the most overbought stocks with an RSI of 74. While the stock is up nearly 20% this year, consensus price targets suggest a further 9% upside potential. On the other hand, Corning, a specialty glass manufacturer, has surged 31% in 2024 but with an RSI reading of 74, it may be due for a slide.
In contrast, American Airlines, with an RSI of 29, is considered one of the most oversold stocks on Wall Street. Despite a 19% decline year to date and recent setbacks, analyst price targets indicate a potential 37% upside. Real estate data firm CoStar Group, with an RSI of 19, is also among the most oversold stocks. Despite a 15% slip in 2024, analysts believe shares could rally 42% going forward.
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