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The Most Overbought and Oversold Stocks on Wall Street This Week
Domino's Pizza and Zions Bancorporation are among some of the most overbought stocks on Wall Street this week, as the S&P 500 rose about 0.7%. The 14-day relative strength indicators for both stocks hovered around 86 on Friday. Wall Street considers a stock overbought and due for a potential pullback when its RSI pushes above 70. Paychex finished the week as the most overbought stock in the index. The payrolls services stock surged nearly 3% this week, with an RSI of around 96. Only about 14% of analysts rate the stock a buy, with the consensus price target implying 4% downside ahead. Other overbought stocks included Zions Bancorporation. Shares surged 17.6% this week as the regional bank stock posted second-quarter earnings that topped expectations. With the gain, it's up about 34.4% for July. The stock's been volatile this year as a crisis rattled the banking sector. Shares are down 26.6% on a year-to-date basis, and its RSI sits at about 86, with the average price target suggesting nearly 6% downside for the shares. Domino's Pizza hovers around a similar RSI to Zions. A little over half of analysts rate shares a buy, with the average price implying rangebound action from here. So far this year, the stock's gained about 11.3% and it's up 14.4% this month. Other overbought names include Global Payments and SLB.
Discover Financial topped the list of the most oversold stocks in the S&P 500, with an RSI of roughly 27. Shares lost 11.3% this week after earnings missed Wall Street's expectations and the company said it's undergoing a Federal Deposit Insurance Corporation probe due to a "card product misclassification issue." A handful of popular consumer names also made the oversold list, including Ford Motor and Nike, at RSIs of about 31 and 32, respectively. Nike shares, buy-rated by nearly half analysts, could rally another 19% based on its average price target. Verizon shares finished slightly lower for the week as backlash continued from The Wall Street Journal's investigation linking the telecommunications industry to lead cable use. Some other oversold stocks included Seagate Technology, Equifax, and Applied Materials.
This week's list of overbought and oversold stocks on Wall Street provides interesting insights into potential market trends. For new businesses, understanding these fluctuations can be important in determining investment strategies or identifying potential opportunities.
Looking at the overbought stocks, Domino's Pizza and Zions Bancorporation stand out as strong performers. Domino's Pizza has seen consistent gains this year, driven by increased demand for food delivery services, while Zions Bancorporation's strong second-quarter earnings have boosted investor confidence. New businesses in the food delivery or banking sectors could find inspiration in these success stories and consider positioning themselves to capitalize on similar trends.
On the other hand, the oversold stocks indicate areas of weakness in the market. Discover Financial's poor earnings and ongoing regulatory probe serve as a cautionary tale for businesses operating in the financial industry. Ford Motor and Nike's oversold status could present an opportunity for new businesses to enter the consumer sector with competitive offerings.
In conclusion, staying updated on the most overbought and oversold stocks can provide valuable insights for new businesses. Analyzing market trends, identifying potential opportunities, and learning from successes and failures can help guide strategic decision-making and enhance chances of success in today's dynamic business landscape.Article First Published at: https://www.cnbc.com/2023/07/22/dominos-pizza-is-among-the-most-overbought-stocks-on-wall-street-here-are-the-others.html