Although the year is just getting started, there may be an opportunity for investors to catch a potential rebound in some stocks or avoid short-term declines. On Friday, the first trading day of 2026, major average stock prices were languid, rising and falling repeatedly. Overall, the week ended down more than 1%. This decline pushed certain individual stocks into oversold territory, making them prime targets for short-term pullbacks. When the Relative Strength Index falls below 30, the stock is considered oversold. However, some stocks ended the week in overbought territory. A stock is considered overbought when the RSI is above 70. Here’s a look at the most oversold and overbought S&P 500 stocks to start the new year. Cloud stock Datadog’s RSI is 16.9, the lowest among S&P 500 members. The stock has been under pressure of late, falling more than 14% in the past month. Still, Wells Fargo analyst Ryan McWilliams thinks the stock could be a buy in 2026. “[We]believe DDOG is the clearest and most NT beneficiary of AI,” he said in a memo last month. “While we recognize the risks associated with large AI labs and the volatility of potential growth, we believe DDOG has established leadership in observability and is poised for continued sustained growth.”Other stocks in oversold territory include Lamb Weston, Marathon Petroleum, CrowdStrike, and AutoZone. Conversely, Molina Healthcare has an RSI of 81.5, making it the most overbought stock in the S&P 500. The company’s stock price has tumbled recently, rising more than 8% this week after prominent short seller Michael Varley highlighted the insurance company in a Substack post. Burley said he likes the stock’s valuation and even compared it to Warren Buffett’s Geico investment. But analysts think the stock could be ahead of the curve. Molina’s average price target suggests a downside of about 6%, according to LSEG data. Other overbought stocks include Freeport-McMoRan following massive gains in silver and other metals. Boeing, Chipotle Mexican Grill, Southwest Airlines.
