As the market experiences a significant sell-off, there are several stocks that have been pushed into oversold territory. This situation may potentially set these names up for a rebound in the near future. The S & P 500, Nasdaq Composite, and Dow Jones Industrial Average all saw declines of more than 2% each, signaling fears of a broader economic slowdown. The tech-heavy Nasdaq is now in correction territory, down more than 10% from its recent record high. Despite the overall market turbulence, some companies could be poised for a bounce back.
One of the most oversold stocks on the list is cybersecurity firm CrowdStrike, with a 14-day relative strength index (RSI) of just 13.6. The company faced challenges following a worldwide IT outage in late July, leading to flight delays and hospital disruptions. Despite the recent setbacks, analysts remain bullish on CrowdStrike, with a consensus price target suggesting a potential surge of 66% from current levels. Another heavily oversold name is Moderna, with a 14-day RSI score of 19.6. The drugmaker’s disappointing quarterly earnings report contributed to a 23% decline in shares. Despite the negative sentiment, the average price target indicates a possible surge of 58.1% from Thursday’s close.
Athleisure brand Lululemon is also among the oversold stocks, with an RSI of approximately 28. The company experienced a downgrade from Goldman Sachs, citing execution challenges and lackluster innovation launches. Despite the recent decline in shares, around two-thirds of analysts still maintain buy or strong buy ratings on Lululemon. The average price target suggests a potential upside of 56.5% from the previous close. Lululemon shares have faced a difficult year, with a significant decline over a 12-month period.
While some stocks are oversold and may present opportunities for a rebound, there are also companies that are overbought and could potentially see a pullback. Defense giant Lockheed Martin, tobacco company Philip Morris International, and FirstEnergy are among the names that fall into this category. Lockheed Martin, in particular, has the highest 14-day RSI reading of 93.7, indicating overbought conditions. Despite positive sentiments from analysts, the stock is trading above its consensus price estimate, suggesting a possible pullback in the future.
Amid the market sell-off and volatility, it is crucial for investors to carefully assess the RSI levels of different stocks to identify potential opportunities and risks. While oversold stocks may offer a rebound opportunity, overbought stocks could face a correction. Conducting thorough research and analysis can help investors navigate through uncertain market conditions and make informed decisions regarding their investment portfolios.