The 10 most overbought and oversold ASX 200 stocks – Week 17
Gold miners maintained their dominance on the overbought list while media and REITs stocks continue to trade in oversold territory.
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Gold miners maintained their dominance on the overbought list while media and REITs stocks continued to trade in oversold territory last week.
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 82.
Most Overbought ASX 200 Stocks
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
CSR | 82 | 0.5% | $8.86 | $7.17 | -19.1% | |
Silver Lake Resources | 78 | 23.7% | $1.44 | $1.69 | 17.8% | |
Ramelius Resources | 74 | 27.6% | $2.06 | $1.98 | -3.9% | |
Red 5 | 73 | 22.9% | $0.43 | $0.39 | -9.3% | |
Whitehaven Coal | 70 | 23.1% | $7.88 | $8.52 | 8.1% | |
Regis Resources | 68 | 23.6% | $2.28 | $2.16 | -5.3% | |
Northern Star Resources | 68 | 12.0% | $15.50 | $15.44 | -0.4% | |
Virgin Money | 68 | 1.7% | $4.12 | na | na | |
Newmont Corp | 68 | 14.5% | $60.09 | na | na | |
Computershare | 68 | 11.5% | $27.92 | $29.59 | 6.0% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data as of the close on Friday, 19 April 2024
Higher gold, higher gold miners
Gold miners surged almost vertically since late February. But as long as good prices keep trending higher, there's no reason to worry about whether or not they're oversold. This begs the question: What's next for gold.
UBS expect gold to make further highs over the coming quarters after a brief pause in the near term. "Although gold’s correlation with rates is currently in question, we still think that Fed easing and the outlook for lower real rates is still the main driver for bullish gold views," the analysts said in a note earlier this month.
"Some profit-taking makes sense after gold’s sharp rally to a new all-time high above the US$2300 psychological level. But we expect the trend of higher lows and higher highs to continue as interest to buy the dip remains strong. We think there’s still a lot of fear of missing out (FOMO) around."
The analysts acknowledged a few downside risks that could undermine its bullish thesis, including:
A hawkish Fed driven by a reacceleration in growth and inflation
US elections could see significant upside risks and weigh on safe haven demand
Reserve management strategies (i.e. ETF and central bank buying) are not broadcasted and they could be very wrong on official sector flows
Most Oversold ASX 200 Stocks
Stocks from sectors including media (Nine and Domain), telcos (Spark and TPG) and REITs (Charter Hall and Centuria) have populated the oversold stocks list.
Media and REITs are in the midst of an earnings downgrade cycle, weighed by factors such a tough advertising market, rising cost of capital and ongoing uncertainty regarding asset prices. Macquarie analysts expect FY24 to represent the trough earnings year for real estate stocks while the ad market is forecast to bottom over the next 6-12 months.
While the analysts and forecast might say one thing – the price action tells a different story.
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Nine Entertainment | 23 | -11.2% | $1.50 | $2.00 | 33.3% | |
HMC Capital | 26 | -14.9% | $6.08 | $6.72 | 10.5% | |
James Hardie | 26 | -11.3% | $53.33 | $61.58 | 15.5% | |
Domain | 27 | -10.2% | $2.91 | $3.54 | 21.6% | |
Spark New Zealand | 28 | -7.2% | $4.27 | $4.60 | 7.7% | |
TPG Telecom | 28 | -7.1% | $4.17 | $5.15 | 23.5% | |
Charter Hall Retail Reit | 28 | -7.3% | $3.30 | $3.84 | 16.4% | |
Centuria Industrial Reit | 28 | -9.3% | $3.21 | $3.61 | 12.5% | |
Telstra Group | 28 | -3.4% | $3.65 | $4.43 | 21.4% | |
Sonic Healthcare | 29 | -4.0% | $26.27 | $31.36 | 19.4% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data as of the close on Friday, 19 April 2024
