As of April 26, 2024, several stocks in the health care sector could be signaling a potential warning to investors who prioritize momentum in their trading strategies. The Relative Strength Index (RSI), a momentum indicator that compares a stock’s strength during price increases to its strength during price decreases, can provide insights into a stock’s short-term performance.
1. Fusion Pharmaceuticals Inc. (FUSN)
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RSI Value:
78.74*
Price Action:
Closed at $21.40 on Thursday*
Recent Developments:
AstraZeneca announced plans to acquire all outstanding shares of Fusion for $21.00 per share in cash, plus a contingent value right (CVR) of $3.00 per share if a specified regulatory milestone is achieved. The stock has surged by approximately 408% over the past six months.2. AstraZeneca PLC (AZN)
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RSI Value:
82.50*
Price Action:
Gained 5.4% to close at $75.03 on Thursday*
Recent Developments:
AstraZeneca reported first-quarter sales of $12.68 billion, a 17% year-over-year increase, slightly below expectations. The stock has gained around 10% over the past five days.3. Boston Scientific Corporation (BSX)
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RSI Value:
76.34*
Price Action:
Gained 0.5% to close at $73.26 on Thursday*
Recent Developments:
Boston Scientific released better-than-expected first-quarter earnings and provided positive guidance. The stock has risen by approximately 8% over the past five days.4. Elevance Health, Inc. (ELV)
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RSI Value:
70.18*
Price Action:
Gained 1.1% to close at $539.68 on Thursday*
Recent Developments:
Elevance Health reported first-quarter revenues of $42.3 billion, a slight miss against consensus estimates of $42.6 billion. The stock has jumped by around 4% over the past month.Investors who rely on momentum as a trading strategy may want to consider taking profits or hedging their positions in these overbought healthcare stocks to avoid potential losses if the RSI indicator suggests a reversal in trend.
