These S&P 500 stocks are deeply oversold and may be due for a rebound
The S & P 500 may have just notched its second down week in a row, but there’s good news for investors: plenty of companies are oversold and due for a rally on a technical basis. The 500-stock benchmark slipped 1% this week, while the tech-heavy Nasdaq Composite plunged 3.5%. The blue-chip Dow Jones Industrial Average was the best-performing index on the week, registering a gain of 1%. Additional tariff promises from the Trump administration have rattled investors in recent days, alongside signs of a potential economic softening . AI poster child Nvidia fell 8.5% on Thursday , in the wake of its latest earnings report, further trampling the market’s optimism to start the new year. Against this background, CNBC Pro used its stock screener tool to identify the most oversold and overbought stocks on Wall Street as measured by their 14-day relative strength index, or RSI. Stocks with a 14-day RSI below 30 are considered oversold, which indicates that a potential rebound may be on the horizon. Conversely, a reading above 70 signals that a stock is overbought, meaning that shares might soon be due for a pullback. Electric vehicle maker Tesla , with an RSI of 18, is among the most oversold stocks on Wall Street. Shares ended the week 13% lower, with Tesla sinking 8% on Tuesday alone . Following Friday’s close, the stock has now fallen 40% from its record closing high on Dec. 17 of $479.86. This move lower followed a Monday report from Reuters that said Tesla’s autopilot software upgrades in China left owners disappointed. Barclays analyst Dan Levy said in a Wednesday note that Tesla’s sell-off may also be caused by a reversal of technical factors that drove the previous rally. “Our best explanation is that there is an unwind of the powerful run that it had last fall post the U.S. elections, which reflected a combination of sharp euphoria and technical factors — with fundamentals largely dismissed,” he wrote. ” Bitcoin has also traded down since mid-December, and has largely mirrored Tesla’s decline in the last month. We believe this may reflect a general pull-back from speculative assets/Trump beneficiaries.” However, on Thursday, Morgan Stanley reiterated its overweight rating on Tesla, with analyst Adam Jonas saying that it was the original equipment manufacturer that would most likely “help ‘transplant’ a Chinese EV maker into the U.S.” Similarly, investors are overwhelmingly bearish around PayPal . The financial payments stock ended the week 5.2% lower following its first investor day in four years , and is now down 17% on the year. At the investor day, CEO Alex Chriss laid out a turnaround strategy at the company that would see payments app Venmo topping $2 billion in revenue by 2027. This compares to PayPal’s last annual revenue estimate for Venmo in 2021 of around $900 million. On the other hand, Philip Morris International made the list of overbought stocks, with an RSI of 78. Year to date, the tobacco giant has surged 29%. The stock rallied 19% this month after the Marlboro owner reported its fourth-quarter results had exceeded analyst expectations, boosted by sales of its Zyn nicotine pouches, which are especially popular with younger populations. In January, Morgan Stanley initiated Philip Morris at an overweight rating , citing the smoke-free product as a major catalyst. “We see continued upside for PMI’s stock as its reduced-risk smoke-free portfolio drives stronger than expected LT sales and earnings growth and becomes an even larger percentage of the mix, which should drive upward re-rating for the stock,” the firm wrote. Biopharma stock Gilead Sciences also clocked an RSI of 78. Shares popped 18% this month after Gilead posted a fourth-quarter earnings and revenue beat earlier in February. Last week, Deutsche Bank upgraded the name to a buy rating from hold. “We’re upgrading GILD to a Buy and raising our DCF-based PT to $120 — our upgrade is based on GILD life cycle managing its core HIV treatment franchise to yield steady revenue growth deep into to the 2030s,” the bank said. Shares of Gilead Sciences are now up 24% on the year. — CNBC’s Fred Imbert contributed to this report.
