The market continues to chug along. However, there are some individual stocks that are now deep in overbought territory and could be due for a pause. The S & P 500 rose about 0.8% this week, notching its fourth weekly advance in five weeks. Those gains came as traders sorted through economic data pointing toward cooling inflation along with comments from Federal Reserve officials that raised questions over future policy moves. On top of that, Wall Street received its first batch of first-quarter earnings. However, the S & P 500’s steady run of late made several stocks overbought. A stock is considered overbought if its 14-day RSI goes above 70, meaning investors should consider easing their exposure. Meanwhile, a stock with a 14-day RSI under 30 is considered oversold, meaning it may be a buying opportunity. CNBC Pro screened for S & P 500 stocks in overbought territory, based on their relative strength index. Here are the 10-most overbought names. Topping the list is fast food giant McDonald’s with an RSI of 98.7. The stock has been on a tear this year, gaining more than 9%. Over the past 12 months, the stock has climbed more than 15%. “Our deep-dive analysis forces us to stick with MCD as a 2023 top pick. The company’s unmatched scale and operational resilience has created strong global momentum, particularly in US where traffic is positive,” Oppenheimer analyst Brian Bittner wrote Thursday. To be sure, while 61.8% of analysts rate the stock as buy, the average analyst price target implies upside of just 2.6% from Thursday’s close. Health care names HCA Healthcare and Universal Health Services also made the list, with RSI scores of 96.74 and 96.04, respectively. Both stocks have upside of just 4%, based on their average analyst price targets. However, more than two-thirds of analysts covering HCA rate it as buy, while just 27% hold the same view on Universal. HCA shares are up nearly 14% year to date, while Universal has lost 3.5%. Other stocks that made the list are Invitation Homes, OneOK, McCormick, Ameren and Edison. Too oversold CNBC Pro also searched for oversold S & P 500 stocks that could be due for a bounce. Just two names had RSI scores under 30, chipmaker Qorvo and MarketAxess. Analysts are mostly downbeat on both names. Just 14.8% of those covering Qorvo have buy ratings on it, FactSet data shows. Meanwhile, only 7.1% of analysts covering MarketAxess rate it as buy. Qorvo shares have lagged the S & P 500 this year, advancing just 3.2%. MarketAxess, meanwhile, is up 20.5%. Other stocks close to being oversold are AMD, Skyworks Solutions, Match Group, Applied Materials, Etsy and Teradyne.
