Several companies appear oversold this week and could be due for a rebound after a wild week on Wall Street. Despite Friday's broad rally, the S & P 500 was headed for its second straight weekly pullback. That would mark the first time since April that the benchmark has posted consecutive one-week declines.
Earlier this week, both the S & P 500 and Nasdaq Composite had their worst days since late 2022 — as investors turned away from mega-cap tech and put their money towards small-caps and other cyclical areas of the market. This recent market action may have pushed some stocks down too much too quickly. Against this backdrop and using the CNBC Pro Stock Screener tool, we found which names appear the most oversold and overbought in this market based on their 14-day relative strength index, or RSI.
Stocks with a 14-day RSI reading below 30 often indicate that it's oversold, with a potential rebound possible ahead for the company's shares. An RSI reading greater than 70 means a stock is overbought, suggesting shares could be at risk of a pullback after too much optimism. Here are some of the most oversold names: Dexcom is the most oversold stock of the list, with a 14-day RSI of 11.
6%. Shares plummeted more than 40% on Friday after the medical device maker posted disappointing quarterly results and weak guidance. Entertainment conglomerate Walt Disney is also oversold, based on the popular metric.
The stock has an RSI reading of about 22. But shares, which are down about 0.5% this year, could make a rebound and jump more than 37%, according to analysts' average price target.
Wells Fargo recently reiterated its overweight rating on Disney and its $136 price target, which implies shares could gain 52.4%. "We consider DIS to be one of the best quality companies in Media.
DIS's unique library and franchises have transformed it into a streaming company, and we're bullish on long-term DTC profitability ...
Long term, Disney is a growth company with arguably the best IP," analyst Steven Cahall wrote in a Wednesday note. Chipotle is another name that could be due for a rebound, given its RSI of 26.8.
Although the stock handily beat Wall Street's estimates for its second-quarter earnings and revenue, shares have slipped more than 7% this week on concerns of increasing costs and slowing same-store sales. "We believe investors are most focused on the deceleration through the quarter (April was the strongest month) and softer start to 3Q," Bank of America analyst Sara Senatore said about the stock reaction. "We continue to view the current demand environment as consistent with a slower – but still healthy – macroeconomy.
" Senatore kept her buy rating and $71 price target, which implies 39.7% upside. That's higher than the consensus price target from analysts surveyed by FactSet, who believe shares can gain more than 26% over the next year.
On the other hand, there are some stocks that are overbought and could be due for a pullback. Mohawk Industries made the overbought list. Shares have jumped more than 22% this week after the flooring manufacturer surpassed earnings expectations and announced further cost-cutting measures.
That's driven the stock's RSI to more than 81. Analysts polled by LSEG think the stock can fall roughly 18%, per their consensus price target. Drugmaker Bristol-Myers Squibb is also considered overbought, with an RSI of 79.
Shares jumped 9% on Friday after the company posted better-than-expected quarterly results , primarily driven by the company's top-selling blood thinner Eliquis and other drugs that it expects to deliver long-term growth. Still, shares are down roughly 4.2% for the year.
Other overbought names include Northrop Grumman and Citizens Financial Group ..
