Wall Street is hoping to enter the last full month of trading in 2023 on a high note. On Friday, all three major indexes rose for the fourth consecutive week. Investors are hoping that the softer-than-expected October inflation print will give the Federal Reserve ample reason to cut benchmark interest rates. Investors as of late are partial toward shares of Mastercard and Norfolk Southern , which ended the week with healthy gains. CNBC screened FactSet data to find the most overbought and oversold stocks, based on the relative strength index (RSI). The relative strength index measures the strength and velocity of stock price moves, and is a useful gauge of whether shares are overbought or oversold. A 14-day RSI reading below 30 indicates a stock is oversold and may present a buying opportunity. A reading above 70 suggests that a stock is overbought and could point to an impending pullback. Mastercard made the list, with a 14-day RSI of 92.11, while shares have climbed more than 18% from the start of the year. Roughly 74% of analysts polled by FactSet maintain a buy rating on Mastercard stock, while their average price targets imply about 8% upside moving forward. In late October, Mastercard beat third-quarter earnings expectations, posting $3.39 per share in adjusted earnings, while analysts polled by FactSet called for $3.21 per share. Revenue came in line with the Street’s forecasts, however. Telecommunications firm Motorola is also overbought, with its 14-day RSI reading of 94.77. Roughly 42% of analysts polled by FactSet rate the stock as a buy, while shares have added more than 24% from the start of the year. Motorola recently increased announced plans to increase its quarterly dividend by 11% to 98 cents a share, and also expanded the company’s stock repurchase program. Other overbought stocks on the list include credit reporting agency Equifax and financial services company Nasdaq Inc . Stocks that are oversold and could be due for a bounce include health-care giant Cigna and oil giant ConocoPhillips . Cigna has a 14-day RSI of 21.57, while ConocoPhillips has a 29.22 reading. Shares of Cigna have have been under pressure from the start of the year, slipping more than 13%. UBS added ConocoPhillips to its tactical picks for November, with the firm noting a potential bounce in oil prices could benefit the stock, given its strong roster of assets and healthy balance sheet. – CNBC’s Fred Imbert contributed reporting.
Source link: https://www.cnbc.com/2023/11/24/these-stocks-are-overbought-and-could-be-due-for-a-pullback.html