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Data Insights
The 10 most overbought ASX 200 stocks – Week 6
By
Kerry Sun
Mon 05 Feb 24, 10:02am (AEST)
Source: Shutterstock
Stocks in article
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 |
|---|---|---|---|---|---|---|
Megaport | 81 | 44.4% | $13.00 | $14.17 | 9.0% | |
Paladin Energy | 79 | 36.1% | $1.38 | $1.45 | 5.5% | |
A2 Milk | 79 | 20.7% | $5.02 | na | na | |
Resmed | 79 | 17.0% | $29.43 | na | na | |
Goodman Group | 78 | 11.0% | $26.98 | $26.28 | -2.6% | |
Altium | 77 | 15.0% | $51.85 | $45.80 | -11.7% | |
Elders | 76 | 22.8% | $9.04 | $7.86 | -13.1% | |
Graincorp | 76 | 15.1% | $8.17 | $8.69 | 6.4% | |
Endeavour Group | 75 | 6.9% | $5.74 | $5.88 | 2.4% | |
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.
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%.
Paladin Energy 12-month price chart (Source: Market Index)
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