The healthcare sector is currently presenting a compelling opportunity for investors seeking undervalued companies. One indicator that can signal potential buying opportunities is the Relative Strength Index (RSI). The RSI is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the market. When the RSI falls below 30, it suggests that an asset is oversold and could be poised for a rebound.
Here’s a closer look at three major healthcare companies currently exhibiting RSI values near or below 30, suggesting they might be oversold and offer a potential entry point for savvy investors:
Nkarta Inc (NKTX)
On August 13, Nkarta reported better-than-expected second-quarter earnings per share (EPS) results. The company highlighted its commitment to patients and its focus on advancing clinical trials across various disease areas. Nkarta’s CEO, Paul J. Hastings, stated that their NKX019 drug has the potential to reach individuals with a wide range of autoimmune diseases. Despite the positive news, the company’s stock has fallen around 35% over the past month, reaching a 52-week low of $1.32. With an RSI value of 29.34, NKTX shares closed at $3.84 on Monday, down 2%.
Moderna Inc (MRNA)
Moderna announced on September 30 that it had dosed the first US participant in its Phase 3 trial for an investigational norovirus vaccine, mRNA-1403. The company emphasized the significant public health burden associated with norovirus infections, which affect millions worldwide annually. The Phase 3 trial aims to evaluate the vaccine’s efficacy, safety, and immunogenicity, potentially offering a new tool to prevent norovirus infections. However, Moderna’s stock has also declined around 23% in the past month, reaching a 52-week low of $58.33. With an RSI value of 24.97, MRNA shares closed at $58.72 on Monday, down 2.5%.
AMN Healthcare Services, Inc. (AMN)
On October 7, B of A Securities analyst Kevin Fischbeck downgraded AMN Healthcare Services from Neutral to Underperform, lowering the price target from $65 to $48. The company’s shares have fallen around 15% in the past month, reaching a 52-week low of $36.50. Despite the downgrade, AMN shares gained 0.8% on Monday, closing at $38.64. The company’s RSI value currently sits at 29.20.
While these healthcare stocks are currently facing some headwinds, their oversold status, coupled with their strong fundamentals and potential for future growth, could present attractive opportunities for investors seeking undervalued companies in the sector. However, as always, it is crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.
