The 10 most overbought and oversold ASX 200 stocks – Week 24

You know it's a pretty downbeat market when names like JB Hi-Fi (ASX: JBH) and Bendigo Bank (ASX: BEN) top the most overbought list.

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, JB Hi-Fi is the most overbought stock on the ASX 200 with an RSI of 72.

Most Overbought ASX 200 Stocks

Target price' is an aggregate of broker target prices from Refinitiv. Data as of the close on Friday, 14 June 2024

JB Hi-Fi shares are up 11% since 29 May to a two month high. There hasn't been a whole lot happening in the retail space. Some of the recent data points of interest include:

• Australian consumer sentiment eased 0.3% to 82.2 in May amid renewed cost-of-living pressures and inflation concerns. The Westpac survey noted ‘finances compared to a year ago’ sub-index dropped 3.6% to just 63.2 in May, taking it back to the low end of the very weak range that has prevailed since late 2022. The ‘time to buy a major item’ sub-index also declined, falling 2.8% to 76.5, an extremely weak level for this component which has been capturing the impact of sharply rising prices on consumers’ purchasing power.

• Australian retail sales rose 0.1% month-on-month in April, up from a 0.4% decline in the previous month. "Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending," said Ben Dorber, ABS head of retail statistics, adding that "Looking across the past two months, we see weak underlying spending in most parts of the retail industry."

• Macquarie recently upgraded JB Hi-Fi and Harvey shares to Outperform on the back of "an anticipated upgrade cycle driven by the launch of AI-ready devices."

Most Oversold ASX 200 Stocks

Target price' is an aggregate of broker target prices from Refinitiv. Data as of the close on Friday, 14 June 2024

Mineral Resources and Pilbara Minerals have wound up as the most oversold stocks on the market. Chinese lithium prices are down around 17% since late April, returning to year-to-date lows of around 96,500 yuan a tonne after a short-lived bounce earlier this year. MinRes has not traded at an RSI this low since the October 2008.