Investors are favoring certain stocks over others as the market weighs the likelihood of another interest rate hike by the Federal Reserve later this year. Wall Street is coming off a losing week: The Nasdaq Composite Index closed 1.9% lower, the S&P 500 fell 1.3% and the Dow Jones Industrials lost 0.8%. Following these moves, CNBC Pro used FactSet data to look for the most overbought and oversold names in the S&P 500 using their 14-day Relative Strength Index (RSI). The relative strength index, which measures the magnitude and speed of price movements, is a popular metric for assessing whether stocks are overbought or oversold. A stock with a 14-day RSI below 30 is considered oversold, indicating that it could be a promising entry point for investors, while stocks with a 14-day RSI above 70 are considered overbought, signaling a possible selling opportunity. Technology was the most overbought sector last week. Many technology stocks have struggled in recent sessions but found their footing on Friday. The most oversold stocks came primarily from the healthcare, consumer goods and industrial sectors. Here are some of the most overbought names in the broad index: Intuit, the maker of TurboTax and Credit Karma software, is the most overbought stock in the S&P 500, with a 14-day RSI above 95. More than two-thirds of them are analysts who Watching the financial software company recommend buying, although the average price target implies an upside potential of less than 1%. Intuit shares have gained nearly 42% so far this year, driven by strong earnings in the fiscal fourth quarter and excitement surrounding Intuit’s investments in artificial intelligence and generative AI software. On Wednesday, the company expanded its product lineup to include generative AI-powered Intuit Assist. IBM is also overbought, with an RSI of 85, although only about 28% of analysts rate the stock a “buy.” Their average price target suggests a decline of 1.3%, according to FactSet. Shares have gained nearly 5% in 2023. Accenture is also overbought, with nearly 56% of analysts rating the professional services stock a “buy.” The RSI is above 83. The company’s average price target suggests shares could gain 3.3%. The stock is a “stealthy way to think about AI,” Piper Sandler’s chief market technician recently told CNBC. Accenture announced in mid-June that it plans to invest $3 billion in its data and AI practice over the next three years. Other overbought names include oilfield services company Baker Hughes (RSI of 85), architecture and manufacturing software provider Autodesk (84) and data services provider Verisk Analytics (84). In contrast, here are the most oversold stocks in the S&P 500: Alaska Air Group has the highest forecast upside on the list (+60%), continuing last week’s trend. The Seattle-based airline has a 14-day RSI of under 17, with 80% of analysts rating the stock as a Buy. Walgreens Boots Alliance is one of the most oversold companies in the S&P 500. The drugstore chain operator has an RSI of under 9 and less than 6% of analysts covering the stock rate it a Buy. Still, Walgreens has more than 40% upside potential based on analysts’ average price target, according to FactSet. The company, which has seen a nearly 41% slump this year, has struggled after demand for Covid tests and vaccines waned. Additionally, Walgreens’ former CEO abruptly left the company earlier this month after two and a half years on the job. Viatris was the most oversold company in the S&P 500, with a 14-day RSI of less than 7. Viatris was formed in 2020 from a merger of Mylan and Pfizer’s Upjohn business and has a consensus price target indicating an upside potential of More than 23% is implied, although only about 9% of Wall Street analysts rate the stock as a buy. Discount retailers Dollar Tree and Dollar General and chemical manufacturer FMC are also among the most oversold companies in the S&P 500.
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