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Data Insights
The 10 most overbought and oversold ASX 200 stocks – Week 16
By
Kerry Sun
Mon 15 Apr 24, 2:00pm (AEST)
Source: Shutterstock
Stocks in article
Key Points
- Six of the top ten most overbought stocks on the ASX 200 are gold miners
- Gold prices have rallied more than 15% since March, buoyed by rising geopolitical tensions, central bank buying and demand for safe haven assets
- Citi says gold prices could go as high as US$3,000 an ounce over the next 6-12 months under its bull case scenario
Gold stocks have rallied into overbought territory, fuelled by soaring prices for the underlying commodity, which briefly hit a new record of US$2,431 an ounce last Friday.
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, CSR (set to be acquired by France's Saint-Gobain at $9.00 cash per share) remains the most overbought stock on the ASX 200 with an RSI of 81.
Most Overbought ASX 200 Stocks
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
CSR | 81 | 0.2% | $8.84 | $6.90 | -21.9% | |
Origin Energy | 79 | 9.2% | $9.77 | $9.91 | 1.4% | |
Silver Lake Resources | 78 | 17.0% | $1.38 | $1.57 | 13.8% | |
West African Resources | 78 | 37.4% | $1.42 | $1.79 | 26.5% | |
Computershare | 75 | 12.9% | $28.24 | $29.07 | 2.9% | |
Red 5 | 75 | 22.9% | $0.43 | $0.37 | -14.0% | |
Altium | 75 | 0.6% | $65.59 | $62.66 | -4.5% | |
Evolution Mining | 75 | 21.7% | $3.98 | $3.86 | -3.0% | |
Ramelius Resources | 73 | 27.1% | $2.00 | $1.95 | -2.3% | |
Newmont Corp | 72 | 14.0% | $60.27 | na | na |
'Target price' is an aggregate of broker target prices from Refinitiv. Data is current as of the close on Friday, 12 April 2024
How High Can It Go?
We're only halfway through April and gold has managed to close at record highs seven times. The yellow metal has managed to rally despite facing a myriad of factors that typically put downward pressure on prices (e.g. rising bond yields, rising US dollar and pushback against rate cut expectations).
Earlier this month, Citi lifted their 0-3 month price forecasts for gold by 9% to US$2,300 an ounce. "A combination of alternative-fiat demand, geopolitical hedges, macro-overlays on equity and credit portfolios, and financial buying catching up to robust physical appear to be working in sync to push the bullion complex higher," the analysts said, adding that "a Fed cycle turn could be a kicker if policymakers proceed with insurance cuts in June/July."
Under a bull case scenario, they believe gold could run as high as US$3,000 an ounce over the next 6-12 months.
While most gold miner charts are relatively vertical, the overbought conditions are likely to persist as long as spot prices continue to mark on.
Most Oversold ASX 200 Stocks
The oversold list continues to feature a number of recurring names such as Orora, Spark New Zealand, IDP Education, and Aristocrat Leisure. The stocks have all sold off for various reasons (e.g. Orora downgraded earnings, IDP Education faces regulatory risks in key markets and Aristocrat has been flagged by analysts regarding softening trends in machine sales) but serve as a reminder that once a stock ends up in deep oversold territory – it often lingers there for a while.
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Orora | 25 | -16.2% | $2.17 | $2.65 | 22.1% | |
Spark New Zealand | 27 | -7.1% | $4.31 | $4.59 | 6.5% | |
IDP Education | 29 | -15.5% | $16.22 | $24.20 | 49.2% | |
TPG Telecom | 30 | -6.5% | $4.30 | $5.15 | 19.8% | |
Sonic Healthcare | 30 | -3.4% | $27.07 | $31.36 | 15.8% | |
Aristocrat Leisure | 31 | -10.4% | $41.16 | $47.89 | 16.4% | |
Charter Hall Retail | 32 | -3.7% | $3.39 | $3.82 | 12.7% | |
Domain | 32 | -9.6% | $3.02 | $3.57 | 18.2% | |
Centuria Industrial Reit | 32 | -3.2% | $3.30 | $3.57 | 8.2% | |
Fletcher Building | 33 | -9.2% | $3.56 | $3.90 | 9.6% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data is current as of the close on Friday, 5 April 2024
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