For traders, one widely-used metric can help participants separate the most overbought, and oversold, stocks on Wall Street right now. The “relative strength index” measures the speed and magnitude of recent price moves , letting investors gauge possible overbought and oversold conditions in the market. A stock that has a 14-day RSI greater than 70 is considered overbought, meaning it may be extended after a strong run, meaning time for investors to reduce exposure. A high RSI is often associated with investors getting too upbeat on a stock, at least in the short term. Conversely, a stock with a 14-day RSI lower than 30 is considered oversold, meaning it may be time for investors to look at accumulating a position. A low RSI can signal that sentiment has gotten too negative around a stock. Although overbought stocks can always rise further, theoretically until their RSI hits 100, and oversold stocks can still fall further, theoretically to 0, looking at RSIs remains helpful for investors looking to lighten up on existing positions or establish new ones. Stocks on Friday capped a losing week, with the S & P 500 falling for the first week in three. Here are the 10 stocks that turned up when CNBC Pro screened for the most oversold in the S & P 500, along with the percentage of analysts rating them a buy, the potential upside to their average price targets and their year-to-date performance. Amgen was identified as one of the most oversold stocks in the S & P 500. The biotech scored the lowest 14-day RSI at 4.3, with a buy rating from just 26% of analysts covering the maker of the Enbrel arthritis treatment. This year, Amgen is down more than 8%. Adding to the poor sentiment around Amgen are some recent sell-side downgrades on Wall Street. In October, Barclays said investors should sell shares of Amgen given high expectations around an obesity drug. Goldman Sachs, however, said in a November note that the obesity treatment can potentially unlock a “blockbuster opportunity.” Moderna shares were also oversold, according to CNBC’s screen. The pharmaceutical stock has a 14.6 14-day RSI rating, with just 35% of analysts rating the stock a buy. Moderna shares have dropped 8% this year. Barclays last month said that Moderna remains a “unique disruptive innovation story,” and remains buy-rated. Meanwhile, the following 10 stocks showed up as the most overbought in the S & P 500, with the same accompanying benchmarks of analyst buys, upside and performance. Investors have pilied into shares of Tesla in 2023, giving 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 some 6% below its current price, according to consensus estimates from FactSet. Still, some analysts expect Tesla shares have further to climb. This week, RBC Capital Markets’ Tom Narayan raised his price target to $223 from $186, which represents more than 7% upside from Thursday’s close. The analyst said Tesla has demonstrated it “can spur demand growth while maintaining margins above 20%, a positive for the near- and long-term outlook.” Meanwhile, American Express has a 14-day RSI of 86.6. The credit card issuer is ahead 21% already in 2023, and could gain another 2% before reaching its average price target. Morgan Stanley analyst Betsy Graseck recently upgraded the stock to overweight from equal weight, saying AmEx’s higher income customer base will insulate it from disproportionately large credit losses. “AXP has a lower risk credit skew with higher FICO card members (5% subprime vs. peer median of ~20%), and we see credit losses hitting pre-Covid levels only by 2024 while all other card peers will overshoot on deterioration,” Graseck wrote. Read More
