A group of well-known stocks including some industry titans could be in for a correction after getting snatched up during this week’s choppy trading. The S & P 500 and Dow Jones Industrial Average were on track midday Friday to post small gains on the week, and the Nasdaq Composite was almost 1% lower the past five days after consumer and producer price indexes both pointed to stubborn inflation. That raised alarm among investors that the Federal Reserve may not begin cutting interest rates as soon, or by as much, as they had expected this year. Despite the market’s lack of direction this week, investors nonetheless poured into some specific stocks, pushing them into overbought territory. CNBC Pro used FactSet data to screen for the most overbought and oversold names in the S & P 500, based on their 14-day relative strength index, or RSI. The RSI, which measures the magnitude and speed of price moves, is a popular yardstick used to evaluate whether shares are overbought or oversold. A stock with a 14-day RSI above 70 is considered overbought, signaling a possible selling opportunity. An RSI of 30 or below suggests a stock is oversold, pointing to what could prove a promising entry point. Here are the most overbought names in the S & P 500 as of Friday morning: Eli Lilly topped the list with an RSI over 89. Shares have climbed more than 2% this week, adding to last week’s gain of more than 10% on the back of earnings. The maker of diabetes and anti-obesity medications stock has gained interest as a potential replacement for Tesla in the “Magnificent Seven,” the group credited with driving up the broader market in recent months. Morgan Stanley analyst Terence Flynn pondered in a Friday note to clients whether it could also be the first pharma stock with a $1 trillion market cap. “We continue to see a path for further upside on higher (1) estimates and/or (2) P/E multiple,” he said, while also raising his price target by $145 to a Street high $950. Flynn’s new target reflects an upside of 25% from Thursday’s close. But after shares have already rallied more than 30% in the new year, Wall Street sees a pullback ahead. Though the average analyst polled by FactSet has a buy rating, the mean price target implies shares could tread water and do little in the next 12 months â unless other analysts similarly raise their price targets. Uber had an RSI of over 83. The ride-share provider jumped nearly 15% this week as investors cheered its board’s first share repurchase authorization, which can show the company is generating excess cash and sees its shares as undervalued. The repurchase was valued at $7 billion. Traders also parsed information on expectations for gross bookings growth during the company’s investor day. Those gains add to an already strong year for Uber, which has climbed nearly 28% in 2024 alone. But analysts have a similar feeling as they do on Eli Lilly: While the average analyst has a buy rating, the price target implies shares can pull back around 1.5%. LLY UBER YTD mountain LLY and UBER, year to date Fewer names passed CNBC Pro’s screen for oversold conditions this week. Still, Akamai Technologies was one with an RSI under 29. Shares tumbled more than 13% this week after the server network provider missed Wall Street expectations for revenue in its fourth quarter. HSBC analyst Stephen Bersey downgraded Akamai to reduce from hold on Thursday, citing weakness in the delivery business and a too-high earnings multiple. “The stock is trading ⦠in-line with other low-growth companies in the sector, but should trade at a discount, in our opinion, due to higher capex intensity,” Bersey wrote to clients. The stock is now down more than 6% on the year, after jumping more than 40% in 2023. Yet, the Street expects a rebound, with the average analyst holding a buy rating and price target implying shares can gain another 13.5%, according to FactSet. Biogen is another stock on the list that took a sizable drop this week, with shares tumbling more than 7%. Earlier this week, the biotechnology company missed analysts’ estimates on both fourth-quarter revenue and earnings. Now, Biogen is down more than 15% since 2024 began. But Wall Street anticipates a turnaround, with the consensus price target reflecting the potential for upside of more than 38%, according to FactSet. Most analysts rate Biogen, with an RSI of a little more than 25, a buy. Here’s the full list: DISCLOSURES: THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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Pharma, ride-share providers among most overbought S&P 500 stocks
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