Investors who prioritize momentum in their trading strategies should be aware of five stocks in the consumer discretionary sector currently displaying warning signs. The Relative Strength Index (RSI), a momentum indicator, measures the magnitude of recent price changes to evaluate overbought or oversold conditions. When the RSI exceeds 70, it suggests that an asset might be overbought.
Here’s a breakdown of the five overbought stocks in the consumer discretionary sector as of September 3rd, 2024:
VOXX International Corp (VOXX):
VOXX International’s stock has surged approximately 92% in the past five days, reaching a 52-week high of $11.70. The company’s board is currently exploring options to maximize shareholder value, including a potential sale. The RSI for VOXX is currently 81.77, indicating a strong overbought condition.
Aramark (ARMK):
Aramark’s stock has climbed around 11% in the past month, reaching a 52-week high of $36.68. The company recently reported better-than-expected quarterly earnings. The RSI for ARMK stands at 71.72, suggesting an overbought condition.
Sharkninja Inc (SN):
Sharkninja Inc’s stock has experienced a significant rise of 31% in the past month, reaching a 52-week high of $95.90. The RSI for SN is 74.23, indicating an overbought condition.
General Motors Co (GM):
General Motors has seen a substantial jump in its stock price, rising roughly 25% in the past month and reaching a 52-week high of $50.50. The company recently announced its intention to move its BrightDrop electric vans under the Chevrolet brand. The RSI for GM is currently 70.42, suggesting a potential overbought situation.
Best Buy Co Inc (BBY):
Best Buy’s stock has experienced a significant surge of 25% in the past month, reaching a 52-week high of $103.71. The company reported better-than-expected second-quarter financial results and raised its FY25 earnings guidance. The RSI for BBY stands at 75.83, indicating an overbought condition.While these companies have experienced positive recent developments, the high RSI values for these stocks may warrant cautious consideration for investors who are primarily focused on momentum-driven trading strategies. It is crucial to note that these observations are based on a specific point in time and market conditions can change rapidly. Always conduct thorough research and consult with a financial professional before making any investment decisions.
