The stock market ended the volatile week lower, but there could still be opportunities for plenty of companies’ shares to rebound. Conversely, some stocks look like they are due for some more cooling off. After a slow start, (trading volume on Monday was the weakest since Christmas), the major averages ultimately registered a weekly decline as inflationary fears, rising Treasury yields and subdued bank earnings weighed on investors. The S & P 500 and Dow Jones Industrial Average fell 1.6% and 2.4% respectively, notching their second week of declines. The tech-heavy Nasdaq Composite dipped 0.5% in its third straight weekly loss. CNBC Pro used its stock screener tool to find the most overbought and oversold stocks on Wall Street as measured by their 14-day relative strength index, or RSI. Stocks with a 14-day RSI above 70 are considered overbought, which indicates that shares might soon turn lower. Conversely, a reading below 30 often signals that a stock is oversold, with a potential rebound possible. Devon Energy made the list of overbought stocks, dominated by oil and gas producers, with an RSI of 82. Year to date, the energy stock has climbed 18%. Earlier this month, shares of Devon popped on the back of a Wells Fargo upgrade to overweight from equal weight. Analyst Roger Read believes Devon can turn things around this year, after struggling with well productivity in 2023. “We expect high-grading efforts in the Delaware Basin will begin to bear fruit in Q2′24, leading to a significant improvement in capital efficiency and a positive re-rating of the stock,” the Wells analyst wrote. With a similar RSI of 82 and after touching an all-time high this past week, the country’s largest oil and gas producer Exxon Mobil also looks overbought. Shares have soared more than 20% this year, almost three times the gain in the S & P 500. Barclays recently initiated research coverage of Exxon with an overweight rating . The bank said the energy “sector offers a better value proposition than ever before.” Farm equipment maker Deere scored an RSI of 79. Truist Securities initiated coverage of the Illinois-based company in March with a buy rating and a price target of $494. “In our view, Deere is among the best-run industrial machinery companies with a growing technology story and earnings stream,” the Truist analyst wrote. Shares of Deere are little changed so far in 2024, down less than 1%. On the other hand, Texas-based life insurer Globe Life , with an RSI of just 3, is among the most oversold stocks on Wall Street. Shares have been cut in half, collapsing almost 52% so far this year. The stock plummeted on Thursday after short seller Fuzzy Panda Research said in a report it had taken a short position in Globe Life, making multiple allegations of insurance fraud. Late Thursday, management rebutted the accusations and Truist Securities repeated a $125 price target on Friday, when shares of Globe Life bounced back 20%. Similarly, investors are overwhelmingly bearish around Lamb Weston . Shares of the Idaho-based french-fry maker have tumbled 26% this year, plummeting almost 20% one day in early April after it missed fiscal third-quarter earnings and revenue. Lamb Weston posted adjusted third-quarter earnings of $1.20 per share on revenue of $1.46 billion, less than earnings of $1.45 on revenue of $1.65 billion that analysts polled by FactSet had expected. — CNBC’s Fred Imbert contributed to this report.
These are the most overbought and oversold stocks on Wall Street after a wild week of trading
Apr 13, 2024
