Must-See Alert: Lockheed Martin and Northrop Grumman Among the Most Overbought Stocks Right Now
While the S&P 500 is on track to end this volatile month higher, some individual stocks might still be due for a pullback. On the final trading day of August, the S&P 500 and Dow Jones Industrial Average are poised for monthly gains of approximately 1%, marking their fourth consecutive winning month despite a sharp global sell-off on August 5. Given this context, CNBC Pro utilized its stock screener tool to identify Wall Street’s most overbought and oversold stocks based on their 14-day relative strength index (RSI).
Stocks with an RSI above 70 are considered overbought and may potentially decline, while those with an RSI below 30 are deemed oversold, signaling a possible rebound. Lockheed Martin stands out with an RSI of about 82.3, having hit a new 52-week high recently. The stock benefitted this week from a $1.3 billion U.S. Army contract for missiles and equipment, awarded to the Javelin Joint Venture, a collaboration between Lockheed Martin and Raytheon, now known as RTX. Another defense stock, Northrop Grumman, has an even higher RSI of 83.6, reflecting increased spending on unmanned systems by the Department of Defense. Opinions on these stocks are divided, with 10 out of 24 analysts recommending a buy or strong buy for Northrop Grumman and 12 being neutral. Investors are slightly more optimistic about Lockheed Martin, with 12 out of 24 analysts recommending a buy or strong buy and 11 holding a neutral stance.
Other overbought stocks include insurer Aflac and utility company Edison International. Conversely, Dollar General tops the list of oversold stocks with an RSI of 19.7 after a dramatic 32% drop on Thursday following missed earnings and revenue forecasts and a cut in its full-year outlook. Competitor Dollar Tree also appeared on the oversold list with an RSI of 21.3, having fallen more than 10% in sympathy. For the week, Dollar Tree shares decreased by around 13%, while Dollar General dropped roughly 30%. Other notable oversold stocks include Moderna and Super Micro Computer.
Original Story https://www.cnbc.com/2024/08/30/lockheed-martin-northrop-grumman-are-among-the-most-overbought-stocks.html
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