Some stocks might experience a pullback after significant gains earlier this week. This shift comes as tensions escalated when Israel launched substantial airstrikes against Iran, marking the most intense action against the country since the Iran-Iraq war in the 1980s. The airstrikes resulted in the deaths of at least three high-ranking Iranian military officials, prompting Iran to retaliate with over 100 drone attacks targeting Israel. As a result, many investors moved their money from stocks to safer assets like US dollars and gold, a trend that continued on Friday. The S&P 500 dropped more than 1% in Friday’s trading, leading to a total annual loss of 0.4%. The Nasdaq Composite and Dow Jones Industrial Average also recorded losses, falling 0.6% and 1.3% respectively for the week.
CNBC Pro analyzed stocks that were identified as over-acquired or oversold by utilizing the 14-day relative strength index (RSI) through a stock screener. An RSI reading exceeding 70 indicates potential over-acquisition, suggesting prices might decline soon, while readings below 30 suggest overselling, indicating potential upward movement. Oracle emerged as the top over-acquired stock on the S&P 500, boasting an impressive RSI of about 90.4. Its shares surged nearly 8% on Friday, achieving an all-time high after a 13% increase the day before, resulting in an overall weekly gain of 24%. Analysts from LSEG have set an average price target of approximately $205, which indicates a potential downside of around 5% from Friday’s closing price. However, many analysts expect these targets might rise following Oracle’s strong revenue report this week. CEO Safra Catz stated that cloud infrastructure revenue could soar by over 70% by 2026, projecting that the coming fiscal year would show even more substantial growth.
Micron Technology also turned up on the list of most over-acquired stocks, with an RSI of 85.1. The company’s stock increased by over 6% this past week, marking its third consecutive week of gains, with total annual profits exceeding 37%. Although prices dipped slightly on Friday, this week maintained a streak of gains. On Thursday, Micron shared plans to invest around $200 billion in US semiconductor manufacturing, promising to create 90,000 direct and indirect jobs.
In contrast, JM Smucker found itself on the unsellable list, showing an RSI near 27. Many Wall Street analysts have rated the peanut butter and jelly company at holds. LSEG reported a consensus price target of $113, suggesting a drop of about 18% from Friday’s figures. The stock has faced challenges this past week, dropping 14% and missing the expected $2.18 billion in revenue for the fourth quarter as forecasted by analysts. Additionally, its full-year revenue guidance fell short of expectations. Over the past eight weeks, its stock price has declined on seven occasions.
Meanwhile, PG&E shares plummeted 13% this week, marking its fourth consecutive decline, with California’s utility’s RSI at a low of 20.6. Over the year, the stock has dropped 32%, in stark contrast to the S&P 500’s modest increase of 1.6%.
