The recent market sell-off has left some stocks in an oversold territory, potentially signaling a rebound in the near future. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all experienced significant drops, with the Nasdaq entering correction territory. Despite the overall market downturn, there are some companies that stand out as potential candidates for a comeback.
One such stock is cybersecurity firm CrowdStrike, which currently has an RSI of just 13.6, making it the most oversold stock on the list. The company faced challenges due to a worldwide IT outage, leading to a 12.5% decline in shares for the week. Despite this, analysts remain bullish on CrowdStrike, with a consensus price target suggesting a 66% increase from current levels.
Another oversold name to watch is Moderna, a drugmaker that saw a 23% drop in shares following disappointing quarterly earnings. The stock has a 14-day RSI score of 19.6, indicating oversold conditions. Despite the bleak outlook, analysts believe Moderna could surge 58.1% based on the average price target.
Athleisure brand Lululemon is also on the list of oversold stocks, with an RSI of around 28. The company recently faced a downgrade from Goldman Sachs, citing execution challenges and lackluster innovation launches. However, the majority of analysts still hold buy ratings on Lululemon, with an average price target suggesting a 56.5% upside potential from current levels.
Stocks facing potential pullback
While some stocks are oversold and poised for a rebound, there are also companies that are overbought and may see a pullback despite the market sell-off. Defense giant Lockheed Martin, tobacco company Philip Morris International, and FirstEnergy are among the most overbought stocks of the week.
Lockheed Martin, in particular, stands out with a 14-day RSI reading of 93.7, indicating overbought conditions. Despite Bank of America upgrading the stock to buy, the stock is already trading above its consensus price estimate, suggesting a potential pullback in the near future.
Amidst the market volatility, investors should closely monitor oversold and overbought stocks to identify potential opportunities for profit. While some companies may be due for a rebound, others could face a pullback in the coming days. Conducting thorough research and analysis is crucial in navigating the unpredictable nature of the stock market.