Data Insights

The 10 most overbought ASX 200 stocks – Week 6

Mon 05 Feb 24, 10:02am (AEDT)
marketsasx
Source: Shutterstock

Key Points

  • A high RSI reading can indicate that the stock is overbought and likely to experience a pullback
  • Megaport is the most overbought stock on the ASX 200 after rallying almost 40% last week
  • The world's largest uranium producer downgraded its production outlook last week, tightening an already constrained market (and sent uranium stock soaring)

A stronger-than-expected Q2 FY24 result and bumper US tech earnings propelled Megaport (ASX: MP1) shares almost 40% higher last week to a near two-year high.

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, Megaport is the most overbought stock on the ASX 200 with an RSI of 81.


Most Overbought ASX 200 Stocks

Ticker

Company

RSI

1-Month %

Close Price

Target price

Upside

MP1

Megaport

81

44.4%

$13.00

$14.17

9.0%

PDN

Paladin Energy

79

36.1%

$1.38

$1.45

5.5%

A2M

A2 Milk

79

20.7%

$5.02

na

na

RMD

Resmed

79

17.0%

$29.43

na

na

GMG

Goodman Group

78

11.0%

$26.98

$26.28

-2.6%

ALU

Altium

77

15.0%

$51.85

$45.80

-11.7%

ELD

Elders

76

22.8%

$9.04

$7.86

-13.1%

GNC

Graincorp

76

15.1%

$8.17

$8.69

6.4%

EDV

Endeavour Group

75

6.9%

$5.74

$5.88

2.4%

PME

Pro Medicus

75

11.6%

$104.80

$81.74

-22.0%

'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 2 February 2024 close.

Megaport's Q2 FY24 result reported:

  • Q2 revenue of $48.6 million, EBITDA of $15.1 million and net cash up $6.9 million

  • FY24 guidance unchanged – EBITDA $51-57 million, Revenue $190-195 million

  • FY24 capex guidance lowered to $20-22 million (previously $28-30 million)

  • Key KPIs QoQ growth: Customers +1%, Ports +2% and Total Services +3%

Citi said Q2 EBTIDA of $15.1 million was ahead of its expectations of $13.5 million (11.8% beat) and well ahead of consensus forecast of $11.3 million (33.6% beat). Revenue of $48.6 million was also a 2% beat while opex was 7% below its expectations.

Overall – Quarterly earnings came out much stronger than expected while full-year capex guidance was lowered by 27.5% at the midpoint.

2024-02-05 09 43 52-Megaport Ltd (ASX MP1) Share Price - Market Index
Megaport 12-month price chart (Source: Market Index)

Uranium stocks experienced a sector-wide rally last Friday, led by names like Deep Yellow (+12.8%), Boss Energy (+7.9%) and Paladin Energy (+7.0%). The key catalyst was a production downgrade from the world's largest uranium producer, Kazakhstan's Kazatomprom.

As they flagged earlier this year, the company's 2024 guidance was cut around 9 million pounds in an already constrained global market of approximately 180 million pounds.

Uranium prices rallied to US$107/lb and most uranium equities rallied around 3-10%.

2024-02-05 09 44 12-Paladin Energy Ltd (ASX PDN) Share Price - Market Index
Paladin Energy 12-month price chart (Source: Market Index)

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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