Stocks that surged higher this week on China’s stimulus wave could soon fall. Last week, the People’s Bank of China unveiled a series of support measures, including cutting the amount of cash banks need to hold, in an effort to boost China’s flagging economy. Since then, the Chinese stock market has been on an upward trajectory, with the CSI 300 Index rising by more than 25% for nine consecutive trading days. The index surged more than 8% on Monday alone, its best single-day performance in 16 years. U.S. stocks related to China were also affected by the gains. Shares of Wynn Resorts and Las Vegas Sands rose nearly 8% and more than 2%, respectively, this week. But common indicators suggest these stocks may now be considered overbought, meaning they could head lower soon. Stocks with a 14-day relative strength index (RSI) above 70 are considered overbought. On the other hand, a reading below 30 means the stock is oversold and may rebound. CNBC Pro used its stock screener tool to find Wall Street’s most overbought and oversold stocks, below: Casino operator Las Vegas Sands, a China-linked company, is on the rise in 2024 Nearly 7%. “Macau is likely to continue to move higher, but there will be no major changes until the economic outlook for mass market customers improves,” the analyst wrote. “Given the economic outlook for mainland China, we now believe that the broader segment of the Macau market is likely to A return to previous expectations is not expected anytime soon.” Chinese company Wynn Resorts also had a high RSI reading of 86. (Vistra) shares are up 260% in 2024, making it the best-performing stock in the S&P 500 this year. Seaport Research Partners analyst Angie Storozynski lowered Vistra’s profit forecast from 2025 to 2028, pointing out that “the forward power curve has been significantly reduced, and future colocation transactions will be more gradual.” She did, however, raise the power generation company’s 2024 forecast. Health insurance company Humana, on the other hand, has an RSI of just 14 and is one of the most oversold stocks on Wall Street. Humana’s stock plunged about 24% this week after the company said in an 8-K filing that only 25% of its members are currently enrolled in Medicare Advantage plans rated 4 stars and above next year. This is significantly lower than the 2024 enrollment rate of 94%. Star ratings provide consumers with a way to compare Medicare Advantage plans, with 1 being the lowest and 5 being the highest. Stephens downgraded the stock to equalweight from overweight, calling Humana’s sharp enrollment decline a “worst-case scenario.” Humana’s shares are down 47% this year. Likewise, investors are extremely bearish on Dollar General, with the company’s RSI at 25. The rating was downgraded to sell from neutral. “DG is known for value. So is WMT, and WMT is hard to beat on price,” analyst Paul Lejuez wrote. “DG is known for convenience (ease of getting in and out of purchases). Since the outbreak, WMT has become increasingly so as well, as consumer perceptions of convenience are changing and WMT has upped its game with omni-channel delivery options.”
Las Vegas Sands is one of Wall Street’s most overbought companies | Real Time Headlines
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