Market Overview: Stocks and Indicators
Recent technical analysis suggests that stocks which have recently seen gains might be at risk for declines. Following the weaker-than-anticipated employment data released in July and changes to tariff rates announced by President Donald Trump, major US indexes experienced a dip on Friday. This raises concerns regarding a possible economic slowdown. For this week, the S&P 500 declined approximately 2.4%, while the Nasdaq composite fell by 2.2%. The Dow Jones industrial average took a more significant hit, dropping 2.9%.
After an up-and-down week, CNBC Pro utilized a stock screener to identify stocks that have been heavily acquired or sold recently, based on the 14-day relative strength index (RSI). Generally, stocks with an RSI over 70 may be considered overbought, while those under 30 are seen as oversold and potentially ripe for profit-taking.
Highlighting some of the most over-acquired stocks this week, Microsoft stands out. The tech giant’s stock surged following impressive revenues in the fourth quarter, with total revenues exceeding $4 trillion and a notable $75 billion in business and cloud services for fiscal year 2025—a 34% increase year-over-year. As a result, Microsoft’s stock gained 2%, and its RSI stands at 78.4, making it one of the most overbought names on the list. Analysts from Goldman Sachs and Bank of America have raised their price targets for Microsoft following these strong results.
Another notable name is Northrop Grumman, with an RSI of 76.1. The defense and aerospace company saw its stock rise 1.7% on Friday, defying the general market trend and achieving record highs. Overall, the stock has grown by 2.9% this week, capitalizing on increasing global defense budgets and geopolitical tensions. Out of 24 analysts, half have a strong buy or buy rating for Northrop Grumman, while the rest have maintained a hold rating.
Additionally, Generac, known for power products, and Western Digital, a data storage firm, are also on the acquisition list, reporting RSIs of 79.1 and 74.2 respectively. On the flip side, some companies have struggled. Centene and Morina Healthcare have faced challenges, with Centene’s RSI at 23.1 after an 8.7% drop this week. The managed care company’s unexpected second-quarter loss weighed heavily on its stock. Overall, healthcare stocks saw a downturn of about 6% this week. Other companies feeling the impact include Charter Communications, WW Grainger, and Gartner.
