Humana’s stock price has more than doubled since the bottom of other stock markets on March 30 during the U.S.-Iranian war. But that rally may have gone too far, as the Louisville-based health insurance company topped the S&P 500’s overbought list by the end of the week. Major U.S. indexes have been volatile over the past five trading sessions as some investors moved to exit semiconductor stocks as they awaited geopolitical developments arising from U.S.-Iran negotiations and reacted to Friday’s SpaceX Inc. IPO. Despite all this, the S&P 500 ended the week up for the 10th time in 11 weeks. Stocks fell on Tuesday and Wednesday after falling nearly 3% last week, but despite the volatile conditions, several stocks rose and reached overbought territory. CNBC Pro used a stock screening tool to identify these stocks based on their 14-day relative strength index (RSI). A stock with a 14-day RSI value above 70 is considered overbought and poised for a fall, while a stock with an RSI below 30 is considered oversold and likely ready for a rebound. The following table shows the most overbought companies in the S&P 500 this week. In particular, we see three healthcare companies as overbought: Humana, CVS, and Cardinal Health. Humana may have doubled since the end of March, but CVS is up 45% over the same period. Cardinal Health is up more than 20% since mid-May. It’s been an eventful week for the broader market, but UBS said in a note on Tuesday that it’s no wonder healthcare has weathered the storm. “Over the past year, the healthcare sector outperformed the S&P 500 on 85% of days when the benchmark declined by 1% or more,” strategists led by the bank’s chief investment officer Ulrike Hoffmann Burchardi wrote. KLAC 5D Mountain KLA Corp. 5-day chart. KLA Corporation similarly looked overbought after rising nearly 30% this week. The semiconductor equipment maker rose nearly 13% on Thursday alone after Oracle Corp.’s capital spending outlook in its latest earnings report highlighted strong demand for chips. JM Smucker Company, the maker of Jif Peanut Butter and Café Bustello coffee, rose 11% this week after the company’s strong financial results. Bank of America analyst Peter Garbo raised his price target on Ohio-based Smucker to $132, suggesting a potential upside of about 14% from Friday’s closing price. “We expect the stock to continue to outperform its food center store peers and undergo multiple reratings,” Garbo said in a note Wednesday. Conversely, the number of most oversold stocks has decreased due to recent market strength. Two of those stocks are Metaplatform, the parent company of Instagram and Facebook, which fell 5% last week and is now down 11% in June. Another is Autodesk, which is down 14% for the week. Adobe also appears to be oversold. Shares fell 6% on Friday after the digital media provider announced the resignation of Chief Financial Officer Dan Byrne and expected annual recurring revenue growth to slow further.
