A few high-flying software and energy names could stumble in the near term, according to one popular technical metric. The major U.S. averages closed out a winning weak. November was a lackluster month, however, as major tech stocks were pressured by worries about high valuations and the eventual profitability of massive artificial intelligence investments. The Nasdaq Composite fell 1.5% during the month, breaking a seven month advance. The S & P 500 and 30-stock Dow eked out small gains. We used the CNBC Pro stock screener to find companies in the S & P 500 that rallied this week and now have a 14-day relative strength index, or RSI, above 70. This makes them technically overbought and priming them for weakness near term. Companies such as Google-parent Alphabet and retailer Ralph Lauren are among the handful of names considered overbought by this metric. Take a look at the basket of stocks that made the overbought list this week: Big Tech’s latest favorite Alphabet is now considered overbought with a 14-day RSI of 72.2. Shares of the company, which has impressed investors with its Gemini 3 AI model and its Tensor Processing Units chips business, rose sharply this week. Wall Street has piled into Alphabet as doubts swirl about the viability of OpenAI’s funding strategies and the strength of ChatGPT compared to Gemini, particularly after the lackluster ChatGPT-5 release in August. “Some investors are petrified that Alphabet will win the AI war due to huge improvements in its Gemini AI model and ongoing benefits from its custom TPU chip,” Melius Research analyst Ben Reitzes wrote to clients in a Nov. 24 note. “Gemini 3 should help the highly profitable API business and arguably vaults GOOGL ahead in agents … the benefits of Gemini 3 are being deployed immediately to help Search within AI Mode, which also helps alleviate concerns in the core business.” GOOGL 1Y mountain Alphabet stock performance over the past year. Merck, with an RSI of 80, was another company on the most overbought list. The pharmaceutical giant in late October reported third-quarter earnings and revenue that beat consensus estimates, partly given strong demand for its cancer immunotherapy Keytruda. Merck had also narrowed its full-year profit outlook to reflect lower estimated tariff costs and other items. On Nov. 14, Merck announced that it will acquire Cidara Therapeutics in a nearly $9.2 billion deal in an effort to gain access to an experimental flu drug. After the stock’s recent rally — Merck shares are up more than 21% in November — analysts appear to believe a near-term pullback could be due. Their consensus price target of $102.43 suggests about 2% potential downside, according to LSEG. Ralph Lauren and Las Vegas Sands are other names considered overbought, with respective RSIs of 71 and 79.8. Ralph Lauren shares jumped 8% this week, bringing its November gain to about 15.5%. The retailer’s strong second-quarter performance and guidance led analysts from firms such as TD Cowen and Telsey Advisory Group to raise their price targets on the stock earlier this month.
