The stock market rebounded from a global crash to end Friday higher, but there’s still a chance some names could recover. Stocks had a rough start to the week. Disappointing payroll data coupled with a breakdown in the yen carry trade, not to mention concerns that the Federal Reserve waited too long to cut interest rates, sent major indexes reeling. But after upbeat weekly unemployment numbers on Thursday, indexes rose and the S&P 500 posted its best day since 2022. The broad S&P 500 gained 0.47% in Friday’s session, ending the week down just 0.04%. The Nasdaq Composite closed 0.51% higher, while the Dow Jones Industrial Average gained 0.13% on Friday. With that in mind, CNBC Pro looked for the most overbought and oversold stocks on Wall Street, as measured by their 14-day relative strength index (RSI). Stocks with a 14-day RSI above 70 are considered overbought, meaning they could be at risk for a decline. Alternatively, stocks with an RSI below 30 are considered oversold, indicating a potential buying opportunity. A rebound could be in store for Disney, with an RSI of 27.7. The company’s shares fell nearly 4% this week, even as the entertainment giant beat Wall Street estimates for its fiscal third quarter. In 2024, the stock, which has a consensus rating of “buy,” is even lower, losing around 4.5%. The company reported that its theme park business in the U.S. was hit by a decline in consumer demand. In a conference call with analysts, Disney executives said they expect attendance to remain flat in the coming quarters. “We’ve seen a little bit of a slowdown in demand. I certainly wouldn’t call that a significant change,” said Hugh Johnston, Disney’s chief financial officer. “I would just call that a kind of slowdown that’s more than offset by the entertainment business.” Take-Two Interactive Software also made it into the oversold category, sporting the highest RSI of the group at nearly 28. On Friday, shares of the video game maker closed more than 4% higher after the company reiterated its full-year guidance for orders and earnings. While shares are slightly up this week, up nearly 1%, the stock is down 10% through 2024. TTWO YTD-Mount Take-Two Interactive Software, year-to-date Other stocks in the oversold group include AI infrastructure firm Super Micro Computer and Ulta Beauty. There are also some names that may have gotten too high and could be in for some losses in the future. Here’s a look at the most overbought names on the Street. Kellanova is one of those names. The stock has the highest RSI of the bunch at 87.2 and is up 19% this week. The stock started the week with massive gains, closing 16% higher on Monday after news emerged that M&M’s and Snickers maker Mars is exploring a takeover of Kellanova. The stock hit a new 52-week high during the session. Shares are up nearly 34% this year. K YTD Mountain Kellanova, year-to-date Axon Enterprise, maker of the Taser, is another name that saw huge gains this week. On Wednesday, the stock — with an RSI of 75.3 — rose more than 18% after the company beat its earnings and revenue forecasts in the second quarter. The company also raised its full-year revenue forecast. Axon Enterprise now expects revenue of between $2 billion and $2.05 billion this year, up from its range of $1.94 billion to $1.99 billion. Analysts remain bullish on the stock and have a consensus rating of Buy. The stock ended the week up nearly 25% and is up more than 41% this year. Axon YTD-Berg Axon Enterprise and Lockheed Martin YTD, which has an RSI of 84.9 and was upgraded from sector perform to outperform at RBC earlier this week, are also in the group. Shares are up 21.7% this year. Northrop Grumman also made the top 10 with an RSI of 75.
