The 10 most overbought and oversold ASX 200 stocks – Week 39
Seven Group is the most overbought stock on the ASX 200 with an RSI of 78.
Mentioned
KEY POINTS
- Overbought stocks may be due for a pullback, while oversold stocks may be due for a rebound
- Seven Group is the most overbought stock on the ASX, reflecting sustained buying for the diversified industrial company
- Qantas has been hit with a torrent of criticism over cancelled flights, poor customer service and leadership changes, and its stock has spiraled into oversold territory
Shares in Seven Group (ASX: SVW) have rallied for 12 consecutive weeks, up 27.4% to record highs, making 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, Seven Group is the most overbought stock with an RSI of 78.
The Most Overbought Stocks
Ticker | Name | RSI | 1-Month % | Last | Target price | Upside |
|---|---|---|---|---|---|---|
Seven Group | 78 | 8.9% | $30.03 | $30.24 | 0.7% | |
Paladin Energy | 76 | 29.0% | $1.09 | $1.06 | -2.8% | |
Coronado Global | 71 | 20.3% | $1.90 | $2.01 | 5.8% | |
Ramelius Resources | 70 | 18.0% | $1.48 | $1.66 | 12.5% | |
Pro Medicus | 69 | 6.1% | $77.77 | $70.31 | -9.6% | |
Computershare | 67 | 6.2% | $26.29 | $27.21 | 3.5% | |
QBE Insurance | 66 | 9.0% | $15.85 | $18.57 | 17.2% | |
Origin Energy | 65 | 2.0% | $8.84 | $8.45 | -4.4% | |
United Malt Group | 65 | 0.3% | $4.95 | $4.81 | -2.7% | |
Johns Lyng Group | 63 | 18.1% | $6.56 | $7.36 | 12.3% |
'Target price' is an aggregate of all broker target prices under Refinitiv's database. Data as at Monday, 25 September 2023 close. (Table: Market Index | Source: Refinitiv)
Seven Group (ASX: SVW) has had a tremendous run in recent months. In summary:
Rallied almost 50% between late September 2022 and March 2023
Traded sideways between March and early July 2023
Hit a fresh all-time high on the third week of July
Positive weekly finishes ever since
Seven Group weekly chart (Source: TradingView)
The company released its FY23 results on 17 August which was most topped analyst expectations:
Revenue up 20% to $9.6bn vs $8.97bn expected by analysts
EBITDA up 15% to $1.69bn vs. $1.64bn expected
Net profit up 18% to $654m vs $660m expected
Final dividend of 23 cents per share
No specific FY24 guidance but expectations to deliver "high single-digit EBIT growth"
The oversold stocks list continues to see some old names like Chalice Mining, Resmed, The Star and Orora. As we noted last week, regardless of how these stocks were sold off, they have the tendency to stay oversold for quite some time.
Which leads us to introduce some new visitors to the oversold space, notably Qantas (ASX: QAN). I'm sure the stock needs no introduction as to why it's been dumped (and hated).
Earlier this week, the company provided a trading update where it rebased its expectations for FY24.
Customer improvements: A further $80 million (on top of the already $150 million budgeted) to improve various customer pain points
Travel demand: "Trading conditions in the first quarter of FY24 similar to the last quarter of FY23."
Fuel costs: Fuel prices up around 30% since May 2023. "If sustained, this is expected to see the Group’s 1H24 fuel bill increase by approximately $200 million to $2.8 billion after hedging."
Across 15 sell-side ratings, 73% remain Buy rated, 20% a hold and 7% a sell. The average price target for Qantas shares has been cut by 8% to $7.63 as at Tuesday, 26 September.
The Most Oversold Stocks
Ticker | Name | RSI | 1-Month % | Last | Target price | Upside |
|---|---|---|---|---|---|---|
Qantas Airways | 16 | -16.3% | $5.13 | $8.27 | 61.4% | |
Chalice Mining | 17 | -55.3% | $2.26 | $4.41 | 95.1% | |
Block Inc | 18 | -19.3% | $70.60 | na | na | |
Resmed Inc | 20 | -14.3% | $21.70 | na | na | |
The Star Entertainment | 20 | -20.6% | $0.75 | $1.20 | 60.0% | |
Orora | 23 | -18.5% | $2.68 | $3.34 | 24.6% | |
Cromwell Property Group | 23 | -16.2% | $0.40 | $0.74 | 83.6% | |
Charter Hall Retail Reit | 23 | -5.9% | $3.19 | $3.98 | 24.8% | |
Bega Cheese | 24 | -12.8% | $2.66 | $3.50 | 31.6% | |
Waypoint Reit | 24 | -8.1% | $2.32 | $2.74 | 18.4% |
'Target price' is an aggregate of all broker target prices under Refinitiv's database. Data as at Monday, 25 September 2023 close. (Table: Market Index | Source: Refinitiv)
