Data Insights

These are the most overbought and oversold ASX 200 stocks – Week 3

Mon 13 Jan 25, 11:24am (AEDT)
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The S&P/ASX 200 continues to face heavy selling pressure against a backdrop of soaring bond yields, rising inflation expectations and a pullback in rate cut expectations for 2025. This challenging environment results in fewer overbought stocks while deepening losses for already overstock names.

RSIs Explained

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. In this weekly series, we observe some of the market's most overbought and oversold stocks.

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.

Most Overbought ASX 200 Stocks

Ticker

Company

RSI

1-Month %

Close Price

MND

Monadelphous Group

78

7.5%

$14.57

LTM

Arcadium Lithium

77

12.7%

$9.13

IFL

Insignia Financial

76

36.0%

$4.12

SIG

Sigma Healthcare

73

4.2%

$3.00

ALL

Aristocrat Leisure

69

4.2%

$71.89

SGM

Sims

68

4.7%

$13.40

STO

Santos

68

6.6%

$6.97

DEG

De Grey Mining

67

0.8%

$1.94

BPT

Beach Energy

66

15.2%

$1.44

GMD

Genesis Minerals

65

1.9%

$2.72

Data as at Friday, 10 January 2025

Key takeaways:

  • Monadelphous remains the market's most overbought stock for a second consecutive week, up 4.2% year-to-date and 7% in the past month. The industrial sector, particularly engineering, shows remarkable strength, likely bolstered by the strong US dollar. Citi analysts noted in December 2023 that defensive sectors and companies with significant US-dollar earnings typically outperform during periods of dollar strength, attributing this pattern to the correlation between defensive performance and economic uncertainty.

  • Arcadium Lithium shares surged 7.9% on Thursday, January 9, following US Committee on Foreign Investment approval for its proposed Rio Tinto acquisition. While the deal still awaits investment screening approvals in Australia, Canada, and Italy, along with other closing conditions, investors responded positively to this key milestone. The stock currently trades at a 3.1% discount to Rio Tinto's offer price of US$5.85 (A$9.5) per share.

  • Energy has flipped the switch to emerge as the best performing sector year-to-date, marking a dramatic turnaround as one of the worst performing sectors in 2024. Oil prices have surged more than 10% since late December after the US imposed sweeping new sanctions on Russia's oil industry. Citi analysts believe these measures could target nearly 30% of Russia crude oil exports, pushing stocks like Beach Energy and Santos into overbought territory.

Most Oversold ASX 200 Stocks

Ticker

Company

RSI

1-Month %

Close Price

SGR

The Star Entertainment

21

-42.1%

$0.11

ELD

Elders

26

-6.8%

$6.95

SEK

Seek

26

-15.5%

$21.77

LOV

Lovisa

28

-14.8%

$26.02

CKF

Collins Foods

29

-9.9%

$7.13

TWE

Treasury Wine Estates

31

-5.7%

$10.84

CU6

Clarity Pharmaceuticals

32

-31.4%

$3.87

DTL

Data#3

32

-17.8%

$6.37

EDV

Endeavour Group

32

-4.7%

$4.09

RHC

Ramsay Health Care

32

-14.5%

$33.75

Data as at Friday, 10 January 2025

Key takeaways:

  • The Star Entertainment Group faces mounting challenges after its recent cash and liquidity update revealed a sharp decline in cash reserves to $79 million as of December 31, 2024, down from $149 million in September. Despite drawing down Tranche 1 of its new debt facility, the company requires additional liquidity support. Management continues to pursue an extra $100 million in funding, though meeting the necessary conditions remains "challenging" given the group's current position.

  • Consumer-related stocks, including Collins Foods, Treasury Wine Estates, and Endeavour Group, continue to face downward pressure in 2025. November's retail sales data fell short of economist expectations, rising 0.8% month-on-month versus the forecast 1.0%. While six of nine spending categories showed growth, the alcoholic beverages and tobacco segment recorded the largest decline at 1.2%.

 

 

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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