Las Vegas Sands is among the most overbought names on Wall Street
Stocks that rode the China stimulus wave higher this week could soon be due for a decline. Last week, the People’s Bank of China unveiled a slate of support measures , including cutting the amount of cash banks need to hold, in an effort to bolster the country’s weakening economy. China stocks have been on an upward tear since then, with the mainland’s CSI 300 index rallying over 25% to rise nine days in a row. The index surged more than 8% on Monday alone, notching its best one-day performance in 16 years. U.S. stocks that are tied to China have also been swept up in the rally. Shares of Wynn Resorts and Las Vegas Sands have respectively gained nearly 8% and more than 2% this week. But a commonly used gauge indicates that these names may now be considered overbought, meaning that they may soon turn lower. Stocks with a 14-day relative strength index reading, or RSI, above 70 are considered to be overbought. On the other hand, a reading below 30 means that a stock is oversold and may be due for a rebound. CNBC Pro used its stock screener tool to find the most overbought and oversold stocks on Wall Street, displayed below: Casino operator Las Vegas Sands is a China-linked name that has jumped nearly 7% in 2024. The stock has an RSI reading of 82. UBS analyst Robin Farley downgraded the stock to a neutral from buy rating in August, noting that the company’s recovery in the Macau market may be an uphill battle. “Macau will likely continue to grind higher, but not see a step change until the economic outlook for the mass market customer improves,” the analyst wrote. “Given the economic outlook in mainland China, we now believe that the broader segment of the Macau market may not recover in the near term to previous expectations.” Fellow China play Wynn Resorts also has a high RSI reading of 86. Shares are up 15% in 2024. Artificial intelligence and data center power play Vistra also made the list with an RSI of 84. With a 2024 advance of 260%, Vistra is the top-performing stock in the S & P 500 this year. Seaport Research Partners analyst Angie Storozynski trimmed 2025-2028 earnings expectations for Vistra, pointing to “sharply lower forward power curves and a more gradual ramp of their future co-location deals.” She did, however, raise 2024 estimates for the power generation company. On the other hand, health insurer Humana , with an RSI of just 14, is among the most oversold stocks on Wall Street. The stock plunged about 24% this week after Humana said in an 8-K filing that just 25% of its total members are currently enrolled in Medicare Advantage plans rated 4 stars and above for the next year. This is drastically below 2024’s enrollment of 94%. Star ratings offer consumers a way to compare Medicare Advantage plans, with 1 being the lowest and 5 the highest. Stephens downgraded the stock to equal-weight from overweight, calling Humana’s plunge in enrollment a “worst-case scenario result.” Shares of Humana are now down 47% on the year. Similarly, investors are overwhelmingly bearish around Dollar General , which has an RSI of 25. Shares of the discount retailer have plummeted about 38% in 2024. Last week, Citi downgraded the stock to a sell rating from neutral, citing competition from Walmart. “DG is known for value. So is WMT, and WMT is tough to beat on price,” analyst Paul Lejuez wrote. “DG is known for convenience (easy in-and-out purchase). And increasingly since the pandemic, so is WMT, as the way consumers think about convenience is changing and WMT has upped its game with omni-channel delivery options.”
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