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Wall Street’s most overbought stocks this week don’t include any technology stocks, a reflection of investors continuing to flee the group in favor of more value-oriented parts of the market. This week, investors cashed in recent gains on high-flying, artificial intelligence growth stocks, rotating instead to overlooked other areas of the market, such as financials, industrials and health care stocks that are more cyclical and sensitive to the course of the economy. The tech-heavy Nasdaq Composite was hit the hardest by this rotation, ending last week 1.6% lower. The S & P 500 followed with a 0.6% decline, while the blue-chip Dow Jones Industrial Average added 1.1%. CNBC Pro used its stock screener tool to identify the most overbought stocks on Wall Street as measured by their 14-day relative strength index, or RSI. Stocks with a 14-day RSI above 70 are considered overbought, meaning that a pullback could be on the horizon. Conversely, a reading below 30 indicates that a stock is oversold and may soon be due for a potential rebound. This week, no stocks were oversold enough to have an RSI below 30. The following table shows stocks with an RSI above 70 that also gained at least 5% this week, as of Friday morning. Notably, no technology stocks made the list. Buffalo, N.Y.-based regional bank M & T Bank made the screen with an RSI of 81. M & T and other regional banks took off on Wednesday as the Federal Reserve cut interest rates for a third time this year, setting up a friendly environment for the group to increase loan growth. But some analysts are getting cautious on the group. In September, Morgan Stanley downgraded the stock to an equal-weight rating from overweight. But analyst Manan Gosalia raised his price target to $251 from $236. “M & T is a high quality bank with significant excess capital/ liquidity, strong credit underwriting and growing fee businesses. With rates coming down, we see fewer positive catalysts in the near-term, and we are moving to the sidelines in favor of other opportunities in our coverage,” the analyst wrote. Gosalia’s revised price forecast was 23% above where shares of M & T closed on Friday, and above the average analyst’s consensus target of $220, according to data from LSEG. More than half the analysts covering the bank (13) rate it a buy or strong buy, with eight calling it no more than a hold and only one saying it’s likely to underperform. Other overbought names on the screen have found more favor from analysts recently, perhaps contributing to their stock runups. For instance, Deutsche Bank upgraded trucker J.B. Hunt Transport Services to a buy from hold in a report issued Thursday. The bank called J.B. Hunt its favorite name in the group. Similarly, on Wednesday UBS initiated research coverage of private equity pioneer KKR & Co. with a buy rating, calling the stock its “preferred way to play a capital markets acceleration.” Southwest Airlines and PNC Financial Services Group were also among the other most overbought stocks that bubbled to the top of the CNBC screen this week.
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