Investors who value momentum in their trading decisions may want to take notice of two stocks in the consumer discretionary sector: CAVA Group Inc (NYSE: CAVA) and Ross Stores Inc (ROST). Both stocks currently exhibit a high Relative Strength Index (RSI), a momentum indicator that compares a stock’s strength during up days versus down days. When the RSI surpasses 70, it typically signals that an asset is overbought.
CAVA Group Inc (NYSE: CAVA)
On Thursday, August 22, CAVA Group will host a conference call to discuss their second-quarter 2024 financial results and provide a business update. The company’s stock has experienced a significant surge, gaining around 28% over the past month and reaching a 52-week high of $102.90. However, the stock’s RSI currently sits at 72.99, suggesting that it might be overbought. On Wednesday, CAVA shares closed at $102.87, up 4.7%.
Ross Stores Inc (ROST)
Ross Stores announced on August 21 that its Board of Directors declared a regular quarterly cash dividend of 36.75 cents per common share, payable on September 30. The dividend will be distributed to stockholders of record as of September 10. The company’s stock has also seen positive performance, increasing around 6% over the past five days and reaching a 52-week high of $157.85. However, its RSI stands at 73.08, indicating potential overbought conditions. On Wednesday, shares of Ross Stores closed at $153.95.
While the recent performance of these stocks is encouraging, their high RSI values suggest that they may be due for a correction. Investors should exercise caution and consider the potential risks before making any investment decisions based solely on momentum. It’s crucial to conduct thorough research and consider other relevant factors before making any investment decisions.
