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Defense Contractor RTX Poised for a Bounce Back, Technical Indicator Suggests
Most Oversold Stocks in the S & P 500
After selling off more than 9% this week, shares of defense contractor RTX appear to be in oversold territory, according to the 14-day relative strength index (RSI). RTX, formerly known as Raytheon, saw its stock plummet 10% after revealing a jet engine problem that required an accelerated inspection timeline. The company's 2023 free cash flow outlook was also affected, resulting in a $500 million reduction. Despite the decline, RTX's RSI reading currently stands at 18, indicating potential for a bounce back. Wall Street analysts have given the stock a buy rating, and the consensus price target implies a 20% upside.
Automaker Ford Motor is another oversold stock, with a 14-day RSI of about 20. Analysts have rated the stock a buy, and the average price target suggests nearly 5% upside. Potato products manufacturer Lamb Weston is the second most oversold stock in the S & P 500, with a 14-day RSI of 19.6. Analysts view the stock favorably, with over 44% giving it a buy rating and an average price target indicating a 20% rally. Estee Lauder, Biogen, and Clorox also made the oversold list.
Most Overbought Stocks in the S & P 500
On the other end of the spectrum, Paychex takes the title of most overbought stock in the index, with an RSI of 94. Despite this, only 14% of analysts rate the stock a buy, and the average price target suggests nearly 8% downside. Union Pacific is another overbought name, with shares surging more than 7% after the announcement of a new CEO. Over half of Wall Street analysts view the stock as a buy, with an RSI of nearly 94. Goldman Sachs also stands out as an overbought stock, with an RSI of 88. The big bank stock has gained close to 3% this year and has a price target implying 7% upside. 3M, Marathon Petroleum, and Home Depot also made the list of overbought names in the S & P 500.
Overall, investors should pay attention to these oversold and overbought stocks as they may present potential buying or selling opportunities. It is crucial to conduct thorough research and analysis before making any investment decisions.
Conclusion: Potential Opportunities and Risks for New Businesses
The analysis of oversold and overbought stocks in the S & P 500 provides valuable insights for new businesses looking to navigate the stock market. Within this context, the defense contractor RTX stands out as a potential opportunity for a bounce back. Despite a recent significant decline due to jet engine issues and reduced cash flow outlook, RTX's oversold status, as indicated by its low RSI reading, suggests a potential recovery. With a buy rating from Wall Street analysts and a consensus price target indicating a 20% upside, the stock could present an attractive investment opportunity for new businesses.
However, it is essential for new businesses to note the risks associated with overbought stocks. Paychex, Union Pacific, and Goldman Sachs, among others, have seen significant price surges, but their high RSI readings indicate potential overvaluation. This could lead to downside risks as indicated by the average price targets and analysts' ratings. New businesses should exercise caution when considering investments in these overbought stocks to avoid potential losses.
In summary, the oversold and overbought stocks highlighted in the S & P 500 provide both opportunities and risks for new businesses. Conducting thorough research, analyzing market indicators like the RSI, and seeking expert advice can help new businesses make informed investment decisions. By leveraging these insights and employing a prudent approach, new businesses can maximize their chances of success in the dynamic stock market environment.
Article First Published at: https://www.cnbc.com/2023/07/29/this-defense-contractor-and-automaker-are-among-the-most-oversold-sp-500-stocks.html.svg)
