This week marked a shift for the stock market, which, after a strong run, faced its first loss in three weeks. The S&P 500 ended the week down 0.5%, while both the Nasdaq Composite and the Dow Jones also dipped, falling 0.3% and 0.2%, respectively. Investors are watching for clearer trade negotiations between the US and its partners, particularly with China, as discussions are scheduled for this weekend. There was some optimism earlier in the week with President Trump announcing a trade deal with the UK, which seemed to boost sentiment.
Using the CNBC Pro Stock Screener Tool, we found stocks most likely to either fall due to over-buying or rise after being oversold, based on the 14-day relative strength index (RSI). An RSI above 70 indicates a potential over-purchase scenario, while an RSI below 30 suggests stocks might be undervalued. Microsoft, for instance, recorded an RSI of 70.2 and has been highlighted as one of the most over-acquired stocks this week, even though it only gained nearly 1%. The broader “Magnificent Seven” category has performed well lately, with Microsoft up 4% compared to a close to 4% drop in the S&P 500 this year.
Rockwell Automation is another notable mention, as its shares soared more than 16% this week. Its RSI sits at 71.2, with analysts predicting potential growth still limited to about 1.7%. Following a strong earnings report that surpassed expectations, shares jumped nearly 12% on Wednesday, along with a raised full-year revenue forecast.
Fertilizer company Mosaic and Paycom Software, which specializes in HR and payroll services, also saw their RSIs exceed 70 this week. Mosaic’s stock rose over 7%, while PayCom increased by more than 11% during the same period.
On the flip side, in the health and science sectors, Vertex Pharmaceuticals and UnitedHealth Group are experiencing struggles. Vertex’s RSI was 28, and UnitedHealth’s was 26.7, indicating significant selling pressure. Vertex’s shares plummeted over 15% after a disappointing quarterly report, despite being up over 5% this year. Meanwhile, UnitedHealth has fallen nearly 5% this week and is down about 25% year-to-date, having also seen a staggering drop of over 34% in the last month as it lowered its annual profit projections.
