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Amidst a week of significant market swings, several stocks have emerged as either overbought or oversold, based on their 14-day Relative Strength Index (RSI). Applied Materials and Western Digital were among the most overbought, driven by positive news and analyst ratings. Conversely, Accenture and Fox Corporation were identified as oversold following major acquisitions and revenue misses, respectively.
Stocks concluded a volatile trading week on an upbeat note, yet some performers nearing their peak may soon experience a downturn. This shortened trading week was marked by considerable fluctuations. Early in the week, stocks saw gains on Monday and Tuesday, buoyed by optimism surrounding a potential peace deal between the U.S. and Iran. However, Wednesday brought a shift as concerns about a potential interest rate hike in 2026 sent the market lower. The major averages recovered on Thursday, with all three indexes ultimately closing the week in positive territory.
Despite the broader market's mixed performance, investors gravitated towards individual stocks, pushing several into overbought territory. CNBC Pro's stock screener, utilizing the 14-day relative strength index (RSI), identified these names. An RSI above 70 indicates a stock is overbought, suggesting a potential pullback, while an RSI below 30 signals an oversold condition, hinting at a possible rebound.
Most Overbought Stocks
Among the week's most overbought names were semiconductor firm Applied Materials and memory stock Western Digital. Applied Materials saw a nearly 9% increase for the week, closing with an RSI of 77. Western Digital experienced a more substantial surge, advancing nearly 33% with an RSI of 78. These gains were partly fueled by President Donald Trump's statement on Truth Social regarding Intel's potential chip design deal with Apple for U.S.-based manufacturing. Applied Materials also received a boost from Citi, which reiterated its 'buy' rating and raised its price target to $710, implying a 15% upside potential.
Financial giants Citigroup and Morgan Stanley also landed on the overbought list. Citigroup's stock rose 2% for the week with an RSI of 75, while Morgan Stanley climbed 4% with an RSI of 74. Both companies reached new 52-week highs on Thursday. Earlier in the week, Wells Fargo affirmed its 'overweight' rating on Citigroup, increasing its price target to $165 from $162, indicating a potential upside of over 15%. Analyst Mike Mayo highlighted Citigroup's focus on 'durability, accountability, and execution,' suggesting an upward bias to estimates.
Most Oversold Stocks
On the other end of the spectrum, Accenture found itself in oversold territory. The stock was down almost 25% for the period, with an RSI of 23. The decline followed the global professional services company's announcement of its agreement to acquire asset intelligence firm runZero and device/software supply chain security company NetRise, along with a majority stake in cybersecurity firm Dragos, for a combined enterprise value of approximately $4.175 billion. Investor sentiment was also dampened by Accenture's fiscal third-quarter revenue of $18.72 billion, falling short of the $18.78 billion analysts had predicted. New bookings for the quarter were $19.3 billion, down from $19.7 billion the previous year. Morgan Stanley had also downgraded Accenture to 'equal weight,' citing concerns about AI spend rationalization, the interest rate environment, and the increasing cost of acquisitions.
Fox Corporation, down over 20% for the week, was another notable oversold name, ending with an RSI of 26. The media company's shares fell after announcing its acquisition of Roku for approximately $22 billion, or $160 per share. Fox stated it secured a $12 billion loan for the transaction and plans to fund the cash component with a mix of new debt and existing cash.
