Wall Street’s most overbought stocks this week included no tech stocks, reflecting investors continuing to flee the group for more value-oriented parts of the market. This week, investors cashed in recent gains in skyrocketing artificial intelligence growth stocks and instead moved their money into stocks that have been overlooked in other parts of the market, such as financials, industrials and health care stocks, which are more sensitive to economic trends and more sensitive to economic trends. The tech-heavy Nasdaq Composite Index was hit hardest by this rotation, ending last week down 1.6%. The S&P 500 fell 0.6%, while the blue-chip Dow Jones Industrial Average rose 1.1%. CNBC Pro used a stock screening tool to identify the most overbought stocks on Wall Street, as measured by the 14-day Relative Strength Index (RSI). A stock with a 14-day RSI above 70 is considered overbought and a decline may be imminent. Conversely, a value below 30 indicates that the stock is oversold and could bounce back soon. No stocks were oversold with an RSI below 30 this week. The following table shows stocks with an RSI above 70 that were also up at least 5% this week as of Friday morning. Notably, tech stocks are not on the list. M&T Bank, a regional bank based in Buffalo, New York, came on the screen with an RSI of 81. Shares of M&T and other regional banks rose Wednesday after the Federal Reserve cut interest rates for the third time this year, creating a more friendly environment for the group to increase lending. However, some analysts are cautious about this group. Morgan Stanley lowered its rating on the stock from overweight to equal weight in September. However, 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 a growing fee business,” the analyst said. “With interest rates falling, there is less upside in the near term, and we are moving to the sidelines in favor of other opportunities within our coverage.” Gosalia’s revised price estimate is 23% above M&T stock’s Friday closing price and above the average analyst consensus target of $220, according to LSEG data. More than half (13) of the analysts covering the bank rate it a “buy” or “strong buy,” eight say it’s only a hold, and only one says it’s likely to underperform. Recently, overbought stocks on screen have received more support from analysts, likely contributing to the stock price rally. For example, Deutsche Bank upgraded trucker JB Hunt Transport Services from buy to hold in a report released Thursday. The bank called JB Hunt its favorite name in the group. Similarly, UBS initiated research coverage on private equity pioneer KKR & Co. on Wednesday with a buy rating, calling the stock a “favorable path to accelerating capital markets.” Southwest Airlines and PNC Financial Services Group were also among the most overbought stocks that rose to the top of CNBC this week.
