These are the most oversold stocks that are ripe for a near-term bounce
Several technology stocks that investors dumped over the past week could now be primed for a comeback, according to one popular momentum indicator. Even with Friday’s stock market gains, all the three major U.S. indexes suffered a losing week. The S & P 500 dropped nearly 2%, a fraction more than the 30-stock Dow Jones Industrial Average . The Nasdaq Composite slid 2.7%, as high-flying artificial intelligence stocks lost momentum even after Nvidia ‘s strong quarterly results. We used the CNBC Pro stock screener to find securities in the S & P 500 that sold off this week and now have a 14-day relative strength index, or RSI, below 30, leaving their price charts technically oversold. Stocks such as database management software provider Oracle , data center networking company Arista Networks and rideshare platform Uber Technologies turned up on the screen. Take a look at the 15 stocks that are the most oversold: Arista Networks was one of the most oversold stocks, with an RSI of 25 after slumping 10.6% this week. The stock, which rallied earlier this year over enthusiasm for its networking equipment that’s needed for AI data centers, is down almost 26% in November alone. Investor sentiment toward Arista soured after it issued disappointing guidance for fourth-quarter sales after third-quarter results topped expectations. Once-hot tech stocks Super Micro Computer and Oracle are now also considered oversold, based on their similar 14-day RSI’s of a little less than 25. Oracle tumbled almost 11% this week, losing nearly 6% on Friday alone, as investors remained concerned about elevated valuations tied to AI names, along with risks associated with debt financing and circular deals to fund AI capex . For all that, analysts still have a consensus buy rating on Oracle with a price target that implies more than 70% potential upside, according to LSEG. Oracle is 43% off its September high. Uber declined 8.5% this week, a victim of the broader market weakness and driving its RSI to 25. The stock has still outperformed the broader market this year, jumping 39%, and analysts polled by LSEG are optimistic on the upside. Earlier this month, Uber reported third-quarter adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, below analysts’ consensus forecast, according to FactSet. Revenue surpassed expectations. “Demand across Mobility & Delivery continued to hold up better than feared in Q3, with solid bookings trends and forward Q4 commentary (especially in the momentum shown in the Delivery commerce initiatives),” Goldman analyst Eric Sheridan, who has a buy rating on Uber, wrote in a Thursday note to clients. “That said, coming out of earnings, we see the narratives around medium-long term investments and their impact on incremental margins as the likely key theme that investors will remain focused on in the coming months — especially with a focus on how the [autonomous vehicles] landscape (both competitively and as a stimulant to UBER’s network) might evolve in the years ahead.” UBER 1Y mountain Uber stock performance over the past year. Other stocks that are oversold and might see a near-term bounce include Humana , Palo Alto Networks and BlackRock .
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