Investors flocked to select stocks like Darden Restaurants and Target, even as their stocks posted weekly losses. Major stock averages closed lower this week as traders digested comments made by President Donald Trump regarding the possibility of National Economic Council Director Kevin Hassett becoming the next Federal Reserve Chairman. Mr. Hassett was widely seen as the front-runner for the post, but Mr. Trump said Friday that he would rather have Mr. Hassett remain in his current position. All three major indexes ended the week in negative territory. Still, investors showed love to certain individual stocks, pushing them into overbought territory. CNBC Pro used a stock screening tool to identify such stocks 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. The following table shows overbought stocks. With an RSI of 77, one of the stocks on the list was Darden Restaurants, owner of chains such as The Capital Grille, Olive Garden, and Cheddar’s Scratch Kitchen. The stock price rose 6% for the week. But some analysts are cautious about the name. Last week, Trust Securities analyst Jake Bartlett lowered Darden’s investment rating from “buy” to “hold” and lowered his price target from $240 to $207. “Following a tough year for restaurants (-17.3% vs. +16.4% for the S&P), the macro environment is mixed and investors are focusing on stocks with unique or ‘self-help’ stories,” he wrote. “We downgrade DRI from buy to hold due to the lack of additional drivers in 2026, the challenge of wrapping strong drivers in 25, and inline valuation.” Bartlett’s latest forecast suggests the stock could fall more than 3% from Friday’s closing price. Recently, overbought stocks on screen have received more support from analysts, likely contributing to the stock price rally. For example, Gordon Haskett upgraded Target from a hold rating to a buy rating on Tuesday. The stock’s RSI was 80. “In the spirit of both a new year/clean slate and the never-ending search for contrarian ideas, we are upgrading our price target from a hold rating to a buy rating and setting a new price target of $140, implying more than 30% upside from current levels,” wrote analyst Chuck Grom. Similarly, Trust last week upgraded aerospace and defense stock Lockheed Martin from hold to buy. The stock has an RSI of 82, making it one of the most overbought stocks on Wall Street this week. Meanwhile, stocks in oversold territory this week include Datadog and Intuit. Datadog makes the list with an RSI of 22. As of Friday’s close, the stock had fallen 5% for the week. However, Morgan Stanley analyst Sanjit Singh’s $180 price target suggests the stock could rise more than 50% from Friday’s closing price. Singh raised his rating on the stock from equal weight to overweight on Monday. “A resurgence of digital transformation and cloud migration efforts, as well as new opportunities to monitor agent apps, are driving core growth acceleration, which should persist through 2027. While risks to initial guidance remain, improving underlying growth trends should ultimately drive the stock higher,” the analysts wrote. Another stock whose fortunes could change soon is Intuit, which has an RSI pegged at 22. However, TD Cowen initiated coverage last week with a buy rating. “We see upside to consensus expectations and the perception that AI risk perception is overdone, and we expect INTU stock to outperform after its recent poor performance,” said analyst Jared Levin. Mr. Levine’s price target is $802, about 47% higher than Friday’s closing price. The stock price fell about 16% over the week.
