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Data Insights
Here are the 10 most overbought and oversold ASX 200 stocks
By
Kerry Sun
Mon 14 Aug 23, 12:14pm (AEST)
Source: iStock
Stocks in article
Key Points
- Construction materials and building stocks are the place to be this reporting season, with Boral and James Hardie both beating earnings expectations
- Quite a few stocks made another appearance on the oversold list, including Core Lithium, Iluka Resources, Regis Resources and Northern Star
Construction materials and building stocks are the place to be this reporting season, with a name like Boral (ASX: BLD) up almost 20% since its earnings on Wednesday, 9 August, which also makes it the most overbought stock on the ASX 200.
The 14-day Relative Strength Index is a momentum indicator that measures the magnitude and speed of recent price changes to assess whether or not a stock is overbought or oversold.
An RSI of 70 or above is considered to be overbought, which means the stock is rising too quickly and likely to experience a pullback. Meanwhile, an RSI of 30 or below is considered to be oversold, which means the stock is falling too quickly and is likely to experience a rebound.
Based on this indicator, Boral is the most overbought with an RSI of 81.
The Most Overbought Stocks
Ticker | Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Boral Limited | 81 | 16.4% | $4.96 | $4.29 | -13.5% | |
News Corp | 79 | 8.7% | $32.61 | na | na | |
Breville | 75 | 8.8% | $24.50 | $22.38 | -8.7% | |
Reece | 75 | 7.9% | $20.16 | $14.87 | -26.2% | |
AMP | 75 | 19.7% | $1.25 | $1.10 | -11.6% | |
Costa Group | 73 | 3.0% | $3.39 | $2.97 | -12.4% | |
Orora | 72 | 8.7% | $3.64 | $3.63 | -0.3% | |
Aristocrat Leisure | 71 | 9.1% | $41.71 | $44.28 | 6.2% | |
Harvey Norman | 71 | 5.5% | $3.87 | $3.77 | -2.6% | |
James Hardie | 71 | 16.2% | $46.47 | $49.94 | 7.5% |
'Target price' is an aggregate of all broker target prices under Refinitiv's database. Data as at Friday 11, August 2023 close. (Table: Market Index | Source: Refinitiv)
"Based on share price reactions recently, the market seems to want to rotate to early cycle sectors such as Building Materials and Retail as slowing inflation and the RBA pause seem to support positioning for a soft landing," Macquarie analysts said in a note last week.
Boral reported FY23 earnings which were comfortably ahead of analyst expectations and the stock re-rated powerfully over the next three sessions:
Thursday, 10 August (results day): +8.5%
Friday, 11 August: +4.6%
Monday, 14 August (as at 12:00 pm AEST): +2.7%
What a powerful combination of better-than-expected earnings, sector tailwinds and market rotation.
As for oversold stocks:
The Most Oversold Stocks
Ticker | Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Core Lithium | 18 | -40.4% | $0.58 | $0.64 | 11.3% | |
Resmed | 22 | -15.1% | $27.47 | na | na | |
NIB | 29 | -4.6% | $7.90 | $8.44 | 6.8% | |
Iluka Resources | 29 | -12.5% | $9.90 | $10.97 | 10.8% | |
Regis Resources | 31 | -26.7% | $1.61 | $2.05 | 27.7% | |
Sims Limited | 32 | -8.3% | $14.34 | $15.29 | 6.6% | |
IGO Limited | 32 | -17.0% | $13.13 | $14.79 | 12.6% | |
Northern Star | 32 | -16.9% | $10.92 | $12.76 | 16.8% | |
Block Inc | 33 | -9.8% | $95.47 | na | na | |
Fisher & Paykel | 34 | -5.1% | $21.66 | na | na |
Quite a few stocks made another appearance on the oversold list, including:
Core Lithium
Iluka Resources
Regis Resources
Northern Star
Core Lithium, Northern Star and Regis Resources all reported June quarter updates that were below market expectations. While they're technically oversold and due to a short-term bounce, the price action suggests that the market refuses to buy into the names that have disappointed.
The list also introduces a few reporting season losers including ResMed, Sims and Block.
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