MRNA is among the most overbought stocks after a record-setting week
It may be time for investors to trim positions in overbought names after the stock market reached record levels this week. The S & P 500 , Dow Jones Industrial Average and Nasdaq Composite all hit all-time highs for the week. However, fresh economic data that dented Federal Reserve rate cut hopes pulled the major averages away from those levels — even as Nvidia soared to new heights thanks to a blockbuster earnings report. Certain stocks this week became overbought, based on their 14-day relative strength index, or RSI. A stock with a 14-day RSI greater than 70 is considered to be overbought and at risk of a pullback, as a high RSI tends to indicate that investors are getting too optimistic about a stock in the near term. A reading lower than 30, on the other hand, signifies that a stock is oversold and could be due for a short-term bounce. Here are the most overbought names in the S & P 500 this week: Moderna was the most overbought stock in the S & P 500, scoring an RSI of about 86.5. Analysts still hold a consensus buy rating on the vaccine maker’s shares, but think the stock stands to drop more than 18%. This year, Moderna shares have jumped nearly 68%. The stock reached a new 52-week high on Friday after its more than 25% gain this week. Shares got a boost on concerns about a couple cases of bird flu reported in humans in the U.S. and an ensuing potential federal government vaccine program . Once a beaten-down stock now turned potential AI play, First Solar also made the overbought list with an RSI of about 81.8. Analysts surveyed by LSEG think the stock could lose nearly 11.4% from its latest close, but maintain a consensus buy rating. Shares soared more than 38% this week after UBS analysts on Tuesday said First Solar is uniquely positioned to benefit from rising electricity demand from artificial intelligence — as major tech companies look to build out data centers powered by renewable energy sources. The company’s earnings are expected to surge 374% to $36.74 per share in 2027, UBS analysts led by Jon Windham said in a research note. Johnson Controls , another recently touted AI play with its HVAC offerings , is also considered overbought. The stock has an RSI of more than 78. Analysts think shares, which have rallied about 28% this year, could peel back roughly 8%. According to a Bloomberg News report Sunday, Elliott Investment Management built a stake of over $1 billion in Johnson Controls, making it among the top 10 investors in the conglomerate. To be sure, some stocks also entered oversold territory. Ulta made the oversold list with an RSI of about 25. Analysts surveyed by LSEG have a consensus buy rating on the stock and think it can jump more than 39% over the next year. Shares have declined about 22.5% this year. Analysts from several firms — including Barclays, Deutsche Bank and Jefferies — have lowered their price targets on Ulta over the past month, however, citing increased competition with brick-and-mortar retailers and a weaker U.S. beauty market. Other oversold stocks include SLB , J.B. Hunt and Molson Coors .
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