For traders, a widely used metric can help participants separate the most overbought and the most sold stocks on Wall Street right now. The “Relative Strength Index” measures the speed and magnitude of recent price movements, allowing investors to gauge possible overbought and oversold conditions in the market. A stock with a 14-day RSI above 70 is considered overbought, meaning it can be extended after a strong run, meaning investors have time to reduce their exposure. A high RSI is often associated with investors being overly bullish on a stock, at least in the short term. Conversely, a stock with a 14-day RSI below 30 is considered oversold, meaning it may be time for investors to consider accumulating a position. A low RSI can signal that sentiment has become too negative around a security. While overbought stocks can always rise further, theoretically until their RSI hits 100, and oversold stocks can still fall further, theoretically down to 0, examining RSIs is still useful for investors looking to ease existing positions or to establish new ones. On Friday, stocks capped a losing week, with the S&P 500 falling for the first week in three. Here are the 10 stocks that emerged when CNBC Pro picked the most oversold stocks in the S&P 500, along with the percentage of analysts rating them as a buy, the potential upside to their average price targets, and their performance since. the beginning of the year . Amgen has been identified as one of the most oversold stocks in the S&P 500. The biotech had the lowest 14-day RSI at 4.3, with a buy rating of just 26% from analysts covering the maker of arthritis treatment Enbrel. This year, Amgen is down more than 8%. Adding to the bad sentiment around Amgen are some recent sell-side downgrades on Wall Street. In October, Barclays said investors should sell shares of Amgen amid high expectations for an obesity drug. Goldman Sachs, however, said in a November memo that treating obesity has the potential to unlock a “successful opportunity.” Moderna shares were also oversold, according to CNBC’s screen. The pharmaceutical stock has a 14-day RSI rating of 14.6, with only 35% of analysts rating the stock as a buy. Moderna shares have fallen 8% this year. Barclays said last month that Moderna remains a “unique disruptive innovation story” and remains listed for buy. Meanwhile, the next 10 stocks emerged as the most overbought in the S&P 500, with the same accompanying benchmarks of analyst buys, upside and performance. Investors invested in shares of Tesla in 2023, which gave it a 14-day RSI of 88.3. The electric vehicle maker is up more than 68% this year, but its average price target is about 6% lower than its current price, according to consensus estimates from FactSet. Still, some analysts expect Tesla shares to continue to climb. This week, RBC Capital Markets’ Tom Narayan raised his price target to $223 from $186, which is more than 7% upside from Thursday’s close. The analyst said Tesla has demonstrated it “can drive demand growth while maintaining margins above 20%, which is positive for both the short-term and long-term outlook.” Meanwhile, American Express has a 14-day ROI of 86.6. The credit card issuer is already 21% ahead in 2023 and could gain another 2% before reaching its average price target. Morgan Stanley analyst Betsy Graseck recently upgraded the stock to an overweight from equal weight, saying AmEx’s higher-income customer base will insulate it from disproportionate credit losses. “AXP has lower credit risk with higher FICO card members (5% subprime vs. peer median of ~20%), and we’re seeing credit losses only reach the levels of pre-Covid than by 2024, while all other map peers will outperform deterioration,” Graseck wrote.
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