Overbought stocks that may cool off as the market trades at record highs
Some stocks are due to cool down after this week’s big market rally, according to one popular metric. The S & P 500 reached an all-time high and closed at a record Friday, marking an incredible turnaround after investors’ more intense tariff and trade concerns have dissipated. Though President Donald Trump said that trade talks between Canada and the U.S . have been terminated, traders managed to look past that development and all three of the major averages ended the week on a strong note. Stocks that have soared during this rally could see a pullback in the coming weeks, however. We used the CNBC Pro Screener to find the most overbought and oversold stocks by measuring their 14-day relative strength index, or RSI. An RSI above 70 suggests a stock could be overbought and could see a near-term decline, while an RSI below 30 implies a stock is oversold and may bounce. Take a look at the overbought group below: Tech stocks and artificial intelligence beneficiaries are some of the most overbought names after this week’s run-up. Jabil, a maker of electronic components and an Apple supplier, is the most overbought name this week with an RSI of 90.8. Shares jumped more than 5% this week and they touched a a fresh 52-week high on Friday. Earlier this month, the company lifted its full-year outlook for core earnings per share and net revenue. Microsoft , Netflix and chipmakers Advanced Micro Devices and Micron Technology also each have high RSIs, implying their shares could see a dip. Microsoft, which has an RSI of 79.1, saw its shares jump nearly 4% this week. Morgan Stanley this week increased its price target on the stock to $530 from $482, saying the firm sees the “yields on Microsoft’s investments in generative AI becoming increasingly apparent.” Wells Fargo also lifted its price target on Microsoft this week, citing “its early AI lead.” Advanced Micro Devices saw a 12% gain this week. It’s one of the stocks that has aided the S & P 500’s comeback since the April low. Data storage stocks Western Digital and Seagate , which have also ridden the AI wave, have high RSIs of 88.6 and 84.8, respectively. Seagate shares have rallied 8% this week and nearly 64% year to date, benefiting from expected growth in storage demand and data centers. Other names that are overbought according to their RSI of roughly 80 are financials JPMorgan Chase & Co and Goldman Sachs . Here are the most oversold stocks on the Street, meanwhile: Food and beverage stocks Molson Coors , Conagra Brands and Campbell’s are considered among the most oversold companies. Molson Coors is the most oversold with an RSI of 18.3. The stock lost 1.3% this week, and it’s down more than 17% year to date. Bank of America downgraded the name to neutral from buy this week. The firm cited ongoing market share loss within the U.S. beer industry and said that the stock’s “valuation reflects uncertainty.” Other oversold stocks are retailers Ross Stores and Lululemon Athletica , which have RSIs of 24.3 and 29, respectively. Lululemon earlier this month exceeded fiscal first-quarter earnings expectations but cut its earnings guidance for the full year.
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