Amidst a volatile trading week that saw the S&P 500’s winning streak snapped, several stocks have entered overbought territory, according to CNBC Pro’s RSI analysis. Hewlett Packard Enterprise, in particular, surged on strong earnings, pushing its RSI to 73.
Other notable names showing high RSI readings include cybersecurity firm Fortinet (RSI 76), Host Hotels and Resorts (RSI 79), and Humana (RSI 77), indicating a need for investors to monitor potential pullbacks.
READ MORE FROM CNBC
The market experienced a turbulent week, with the S&P 500 reaching new highs before a significant sell-off in chip stocks on Friday pulled the index down, breaking its nine-week winning streak. Despite the broader market's volatility, several individual stocks have surged into overbought territory, signaling potential pullbacks but also highlighting strong investor interest.
CNBC Pro's analysis, utilizing a 14-day relative strength index (RSI) screener, identified stocks with an RSI above 70 as overbought. An RSI reading above 70 suggests a stock has moved up too quickly and may be due for a correction, while an RSI below 30 indicates it might be oversold and poised for a rebound.
Hewlett Packard Enterprise Leads the Pack
Hewlett Packard Enterprise (HPE) stood out as one of the most overbought stocks, driven by an impressive earnings report. The tech giant reported a 14% weekly gain after exceeding analysts' expectations for cloud and artificial intelligence revenue in its fiscal second quarter. HPE posted adjusted earnings of 79 cents per share on $10.68 billion in revenue, a significant beat compared to the forecasted 53 cents per share and $9.79 billion in revenue. This performance marked the company's best earnings beat since 2018.
Following the strong quarterly results, Loop Capital upgraded HPE to a 'buy' rating from 'hold', setting a new price target of $75, a substantial increase from $23, implying a 52% potential upside. Analyst Ananda Baruah noted the "historic blowout quarter" and believes the company is at the "front end of a 3-5 year growth expansion" driven by the adoption of agentic and inferencing technologies.
HPE's RSI closed the week at 73, firmly in overbought territory.
Cybersecurity firm Fortinet also saw significant investor attention, finishing the week with an RSI of 76. The stock experienced volatility, reacting to earnings reports from its peers, Palo Alto Networks and CrowdStrike. Despite a 3% dip on Friday amid a broader tech sell-off, Fortinet shares managed to advance nearly 5% for the week, even touching a 52-week high on Thursday.
Other Notable Overbought Stocks
The list of most overbought stocks also included Host Hotels and Resorts and Humana, which closed the week with RSIs of 79 and 77, respectively.
Related Articles
By Lisa Kailai Han
By Alex Harring
By Nick Wells
