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Data Insights
The 10 most overbought and oversold ASX 200 stocks – Week 2
By
Kerry Sun
Mon 08 Jan 24, 10:29am (AEST)
Source: Shutterstock
Stocks in article
Key Points
- News Corp is the most overbought stock on the ASX 200 with an RSI of 76
- Activist pressure on News Corp to sell its majority REA stake has fueled the rally
- Energy and lithium stocks dominated the oversold list in December, now replaced by tech and battery metal names like Megaport and Iluka
News Corp (ASX: NWS) shares have been on a six month tear, up 52% since May 2023 amid growing expectations that the company will sell its majority stake in REA Group.
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, News Corp is the most overbought stock on the ASX 200 with an RSI of 76.
The Most Overbought Stocks
Ticker | Company Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
News Corp | 76 | 9.8% | $37.93 | na | na | |
Magellan Financial | 76 | 25.8% | $9.65 | $7.68 | -20.4% | |
CSL | 75 | 9.0% | $287.94 | $304.86 | 5.9% | |
Neuren Pharma | 74 | 49.7% | $24.11 | $26.43 | 9.6% | |
Whitehaven Coal | 71 | 9.2% | $7.86 | $8.17 | 3.9% | |
Bank of Queensland | 71 | 9.0% | $6.15 | $5.00 | -18.7% | |
Bendigo and Adelaide Bank | 71 | 6.9% | $9.77 | $9.11 | -6.8% | |
Commonwealth Bank | 70 | 7.5% | $112.99 | $89.32 | -20.9% | |
Medibank | 69 | 5.2% | $3.67 | $3.88 | 5.7% | |
Insignia Financial | 69 | 14.3% | $2.48 | $2.33 | -6.0% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 5 January 2024 close.
News Corp's REA Stake
News Corp has faced growing activist pressure to offload its 61.6% stake in REA Group, which could unlock more than $11 billion in value for shareholders. This has fuelled much of its share price in the December quarter.
Activist investor Starboard Value declared in a presentation last month that the company's ownership of Dow Jones alone could be worth more than US$7 billion if it were valued at a similar multiple as the New York Times, the AFR reports.
For context, News Corp owns 100% of Dow Jones, which includes publications such as The Wall Street Journal, MarketWatch and Barrons.
The Most Oversold Stocks
The oversold list was dominated by energy and lithium names in December. These stocks and sectors have somewhat stabilised and now replaced with stocks from tech and battery metal sectors.
Ticker | Company Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Megaport | 28 | -14.2% | $8.58 | $12.84 | 49.7% | |
Light & Wonder | 29 | -12.2% | $117.20 | na | na | |
Gold Road Resources | 31 | -13.4% | $1.71 | $1.98 | 15.8% | |
Iluka Resources | 32 | -10.4% | $6.31 | $7.88 | 24.9% | |
Graincorp | 35 | -6.2% | $7.09 | $8.70 | 22.7% | |
Bellevue Gold | 35 | -18.2% | $1.49 | $1.77 | 19.2% | |
Nickel Industries | 37 | -7.0% | $0.66 | $1.06 | 60.6% | |
Chalice Mining | 37 | -9.3% | $1.41 | $2.90 | 105.7% | |
Altium | 37 | -2.8% | $44.04 | $42.40 | -3.7% | |
Domain | 38 | -3.5% | $3.30 | $3.63 | 10.0% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 5 January 2024 close.
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