The 10 most overbought and oversold ASX 200 stocks – Week 48
Seven Group's shares are the most overbought on the ASX, with an RSI of 74.
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Mentioned
KEY POINTS
- Seven Group's shares are the most overbought on the ASX, with an RSI of 74
- November 2023 AGM season highlights a trend of downgrades slowing and companies becoming more positive about their outlook
- Liontown Resources shares have been among the top ten most oversold stocks for four consecutive weeks
Seven Group (ASX: SVW) shares rallied into overbought territory after management upgraded its FY24 outlook from "high single-digit EBIT growth" to "high single to low teen EBIT growth". The stock is up around 7% since the upgrade and up around 20% since its late-October low.
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 is the most overbought stock with an RSI of 74.
The Most Overbought Stocks
Ticker | Company Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Seven Group | 74 | 18.8% | $31.94 | $32.11 | 0.5% | |
Neuren Pharmaceuticals | 72 | 46.4% | $14.90 | $20.02 | 34.4% | |
Fortescue | 71 | 12.7% | $25.03 | $18.99 | -24.1% | |
Graincorp | 71 | 15.8% | $7.84 | $8.73 | 11.4% | |
Elders | 69 | 23.3% | $7.26 | $7.77 | 7.0% | |
Bega Cheese | 69 | 6.6% | $3.07 | $3.21 | 4.6% | |
Bellevue Gold | 69 | 14.2% | $1.61 | $1.73 | 7.5% | |
Pro Medicus | 68 | 16.1% | $88.08 | $80.08 | -9.1% | |
Block Inc | 68 | 37.0% | $89.65 | na | na | |
Perpetual | 68 | 17.5% | $22.26 | $25.49 | 14.5% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 24 November 2023 close.
Seven's guidance upgrade highlights a notable trend observed during the November 2023 AGM season: Downgrades are decelerating and companies are increasing positive about their near-term outlook.
"We still think the rate of EPS decline has troughed for this min-cycle and that we do not see larger cuts to EPS forecasts," Macquarie analysts said in a note last week.
"Of the nine stocks that did change guidance there were seven upgrades (360, SQ2, TPG, BLD, ORG, SDF and SVW) and two downgrades (BSL, CCP). Again, this is more positive than last year."
The Most Oversold Stocks
Ticker | Company Name | RSI | 1-Month % | Close Price | Target price | Upside |
|---|---|---|---|---|---|---|
Liontown Resources | 22 | -18.1% | $1.40 | $2.04 | 45.7% | |
Healius | 27 | -27.2% | $1.30 | $2.15 | 65.4% | |
The Star Entertainment | 28 | -16.0% | $0.50 | $0.94 | 88.0% | |
AGL Energy | 28 | -7.4% | $9.96 | $11.40 | 14.5% | |
TPG Telecom | 28 | -9.2% | $4.66 | $5.45 | 17.0% | |
Chalice Mining | 31 | -17.9% | $1.47 | $3.36 | 128.6% | |
Virgin Money | 32 | -0.4% | $2.78 | na | na | |
IGO | 32 | -18.7% | $8.74 | $11.95 | 36.7% | |
Bapcor | 33 | -0.7% | $5.37 | $6.83 | 27.2% | |
Woolworths | 33 | -1.9% | $34.51 | $39.04 | 13.1% |
Liontown shares have remained among the top ten most oversold stocks for a fourth consecutive week, highlighting the difficulty for oversold stocks to regain momentum.
To add further insult to injury, Chinese lithium carbonate prices extended its decline to 130,000 yuan a tonne last week – The lowest since August 2021. You can read more about the state of play for lithium markets here.
Markets have bounced quite strongly in November, which has helped a few recurring oversold names like AMP, Credit Corp ,Tabcorp, New Hope and Orora finally escape the oversold zone.
