Gold has rallied to a near three-month high as the escalating conflict in the Middle East is sending investors flocking towards the safe-haven metal. The V-shaped rally for gold has brought names like Ramelius Resources (ASX: RMS), Gold Road (ASX: GOR) and Northern Star (ASX: NST) into the most Overbought stocks list for this 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, Ramelius Resources is the most overbought stock with an RSI of 73.
Ticker | Name | RSI | 1-Month % | Close Price | Target price | Upside |
---|---|---|---|---|---|---|
Ramelius Resources | 73 | 17.7% | $1.73 | $1.71 | -1.2% | |
News Corp | 71 | 12.1% | $35.48 | na | na | |
Capricorn Metals | 69 | 11.3% | $4.81 | $4.83 | 0.4% | |
Gold Road Resources | 69 | 11.0% | $1.86 | $1.94 | 4.3% | |
Whitehaven Coal | 67 | 12.5% | $7.54 | $7.96 | 5.6% | |
Northern Star Resources | 67 | 12.0% | $12.13 | $13.23 | 9.1% | |
Origin Energy | 67 | 5.6% | $9.19 | $8.45 | -8.1% | |
Bega Cheese | 63 | 7.0% | $2.92 | $3.22 | 10.3% | |
Silver Lake Resources | 63 | 11.7% | $1.01 | $1.58 | 57.2% | |
Santos | 62 | 5.4% | $8.00 | $9.08 | 13.5% |
Gold has climbed more more than 8% from its October 5 low to a brief high of US$1,997 an ounce. This resurgence is further fueled by a weakening US dollar and Fed Chair Powell's relatively dovish remarks last week.
Ticker | Name | RSI | 1-Month % | Close Price | Target price | Upside |
---|---|---|---|---|---|---|
Liontown Resources | 10 | -36.7% | $1.90 | $2.66 | 40.0% | |
Credit Corp | 16 | -38.0% | $12.40 | $18.90 | 52.4% | |
AMP | 18 | -16.9% | $1.06 | $1.15 | 8.5% | |
Telix Pharma | 19 | -25.4% | $8.40 | $12.63 | 50.4% | |
Bapcor | 21 | -20.5% | $5.52 | $6.83 | 23.7% | |
Magellan Financial | 23 | -30.8% | $6.44 | $8.16 | 26.7% | |
Chalice Mining | 24 | -27.0% | $1.86 | $2.74 | 47.7% | |
Alumina | 24 | -19.8% | $0.81 | $1.10 | 35.8% | |
Insignia Financial | 25 | -14.6% | $2.04 | $2.82 | 38.2% | |
Tabcorp | 26 | -11.3% | $0.86 | $1.10 | 27.9% |
Most of these stocks have sold off due to downbeat trading updates.
Credit Corp (Oct 18): FY24 impairment. Downgraded FY24 statutory net profit by ~56%
AMP (Oct 18): FY24 guidance downgraded NIM outlook to below previous guidance
Bapcor (Oct 17): Shorter-term macroeconomic headwinds have led to more moderate growth for trade and wholesale markets as well as further deterioration in retail. Year-to-date net profit at the end of September was "behind expectations we had at the beginning of the year."
Tabcorp (Oct 12): Q1 trading update notes revenue down 6.1% year-on-year amid moderating wagering and gaming turnover
Magellan (Oct 6): Funds under management of $35.0 billion as at 29 September vs. $39.0 billion in the previous month
Even though they've fallen into oversold territory, most of these stocks have struggled to recover. Here's how they've performed since the above dates:
Credit Corp is trading around the same levels after the 30.5% selloff
AMP shares are down around 7.3% since the downgrade
Bapcor is down another 8.9% after falling 11.5% after the trading update
Tabcorp is down another 7.1% after a 6.2% selloff following the trading update
Magellan plunged 18.5% after the funds update and its down another 9.6% since
The persistent decline in these stocks despite their oversold status indicates that investors are hesitant to engage in dip-buying amidst broader market uncertainties.
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