Stocks wrapped up a volatile week on a positive note, although some winners might face quick declines. This shortened trading period, influenced by potential peace talks between the U.S. and Iran, saw gains on Monday and Tuesday. However, worries about a possible interest rate hike in 2026 led to a drop on Wednesday. The major indexes bounced back on Thursday, ending the week on an upswing.
Investors gravitated toward certain stocks, pushing some into overbought territory. Using its stock screener, CNBC Pro highlighted stocks with a 14-day relative strength index (RSI). An RSI above 70 indicates overbought conditions, while below 30 suggests oversold status, which might signal a potential rebound.
Among the most overbought stocks, semiconductor firm Applied Materials and memory company Western Digital stood out. Applied Materials gained nearly 9% this week, finishing with an RSI of 77. Western Digital surged almost 33% with an RSI of 78, particularly after President Trump announced a partnership between Intel and Apple for chip production in the U.S. Additionally, Applied Materials received a boost from Citi’s reaffirmation of a buy rating, with an increased price target of $710, indicating a projected rise of 15% from Thursday’s closing price.
Citigroup and Morgan Stanley also ranked high on the overbought list, with their stocks rising by 2% and 4%, respectively, ending the week with RSIs of 75 and 74. Both companies reached new 52-week highs on Thursday. Wells Fargo recently upgraded its outlook on Citigroup, raising its price target from $162 to $165, suggesting a potential upside exceeding 15%. Analyst Mike Mayo pointed out that Citigroup is undergoing significant changes focused on durability and execution.
Conversely, some stocks found themselves in oversold territory, like Accenture, which dropped nearly 25% this week with an RSI of 23. The company saw an 18% decline on Thursday after announcing the acquisition of major stakes in multiple firms, a move that disappointed investors. Analyst James Fawcett noted the challenges ahead but still sees Accenture positioned for long-term recovery despite growing uncertainties.
Another heavily oversold stock was Fox Corporation, down over 20% for the week and ending with an RSI of 26. This week, Fox revealed plans to acquire Roku for approximately $22 billion, aiming to fund the deal with both new debt and available cash.
