The Relative Strength Index (RSI) is a valuable tool for investors seeking to identify potential shifts in stock momentum. When the RSI exceeds 70, it generally indicates an overbought condition, suggesting the stock’s price may be due for a correction. As of September 9, 2024, two healthcare stocks have triggered overbought signals, potentially raising concerns for investors who prioritize momentum in their trading decisions.
Terns Pharmaceuticals (TERN)
On September 9th, Terns Pharmaceuticals released positive top-line data from its Phase 1 trial for TERN-601, a drug being investigated for treating obesity and overweight. The company’s stock has enjoyed a strong run over the past month, gaining nearly 19%. Its 52-week high stands at $10.03. However, with an RSI of 73.09, TERN is currently considered overbought. On Friday, September 9th, TERN shares closed at $7.81, representing a 4.7% gain.
Immunovant (IMVT)
Immunovant also reported encouraging news on September 9th. The company announced positive results from its Phase 2a trial of batoclimab, a potential treatment for Graves’ Disease. This news has contributed to a 17% surge in Immunovant’s stock price over the past month. The stock has reached a 52-week high of $45.58. Nevertheless, its RSI of 72.34 signifies an overbought condition. Immunovant shares closed at $34.03 on Friday, representing a 1.2% increase.
The overbought status of these healthcare stocks suggests that they may be due for a short-term pullback. Investors should exercise caution and consider this information alongside other fundamental and technical factors when making trading decisions.
