Delta As The Most Overbought Stock On Wall Street

Delta Air Lines has reached an extremely overbought status with a 14-day relative strength index (RSI) of 100, the highest possible level. This comes after the stock experienced a nearly 9% rally this week and the resumption of its quarterly dividend. The positive sentiment surrounding the travel industry has contributed to the significant increase in Delta shares this month. However, the extremely high RSI suggests that the stock may face a short-term pullback, despite the fact that 85% of analysts covering Delta have buy ratings on the stock.

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Another notable overbought stock in the S&P 500 is retail giant Walmart, which has an RSI of nearly 97. Although the stock has gained almost 10% year-to-date and has a majority of analysts with buy ratings, the average analyst price target implies only a 7% upside over the next 12 months.

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Tesla, the electric vehicle maker, also falls into the overbought category with an RSI of over 96. The stock has seen remarkable growth this year, more than doubling in value. However, after a 13-day winning streak, Tesla's stock price experienced a decline. Analysts, on average, predict a drop of over 20% following its recent surge. Bernstein's Toni Sacconaghi, who has been skeptical about Tesla, pointed out similarities between Tesla's situation and Ford's during the Model T era, cautioning that Tesla's cost advantage may not be as sustainable in today's global and highly competitive auto market.

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Several other stocks, including American Airlines, Netflix, Norwegian Cruise Line, Advance Auto Parts, Dollar General, Campbell Soup, General Mills, SolarEdge Technologies, and Kraft Heinz, are also exhibiting oversold conditions based on their respective RSIs. These stocks may be due for a rebound in the near term.

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It is important to consider the RSI as an indicator of potential short-term market conditions, but further analysis is needed to assess the overall investment outlook for these stocks.

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