Investors who value momentum as a key factor in their trading decisions should keep a close eye on four healthcare stocks currently exhibiting overbought signals. The Relative Strength Index (RSI), a momentum indicator that measures the strength of price gains versus losses, can provide insights into a stock’s short-term performance. An RSI reading above 70 is generally considered overbought, indicating a potential for a price correction.
Doximity Inc (DOCS)
, a leading platform for medical professionals, has seen its stock price surge recently following strong first-quarter earnings and positive FY24 revenue guidance. However, with an RSI of 82.05, the stock appears overbought.
Gilead Sciences, Inc. (GILD)
, a biopharmaceutical giant, has witnessed a price increase in recent weeks, but its RSI stands at 72.77, indicating a potential for a pullback. This comes after the company voluntarily recalled one lot of its COVID-19 treatment, Veklury, due to glass particles found in vials.
Genfit SA (GNFT)
, a clinical-stage biopharmaceutical company, has seen its stock jump in the past five days after reporting strong H1 2024 results. However, its RSI of 70.41 suggests the stock may be overextended.
Bullfrog AI Holdings, Inc (BFRG)
, a company developing AI-powered drug discovery solutions, has experienced a significant stock price increase following announcements of advancements in its research on bipolar disorder. Its RSI of 78.66 indicates a potential for a short-term correction.Investors are advised to exercise caution when dealing with stocks displaying overbought signals. While these companies show promise, the current RSI levels suggest a temporary pause in their upward momentum might be in order. As always, it is crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.
