Given recent market trends, now could be an advantageous time to contemplate investment opportunities in Tesla, as indicators suggest the potential for a rebound in its stock price.
This week, the broader market has encountered challenges, witnessing notable declines across tech-related sectors, including Tesla. Week-to-date, the S&P 500 has experienced a slight decrease of 0.2%, while the Dow Jones Industrial Average has seen a dip of 0.1%. Correspondingly, the Nasdaq Composite, heavily influenced by tech stocks, has retreated by 0.8%.
Nevertheless, despite the prevailing market downturn, certain individual stocks may have been subject to excessive sell-offs. Leveraging the CNBC Pro Stock Screener tool, analysis has been directed towards identifying the most overbought and oversold stocks within the S&P 500 based on their 14-day relative strength index (RSI).
Stocks with a 14-day RSI surpassing 70 are classified as overbought, indicating potential vulnerability to a pullback since high RSIs typically signify excessive investor optimism within a short timeframe. Conversely, stocks with RSI readings below 30 are labeled as oversold and may present an opportunity for recovery.
Among the most oversold stocks, Tesla emerges as a prominent example. While the electric vehicle manufacturer experienced a remarkable surge in 2023 fueled by robust revenue and delivery figures, its performance has stumbled in the current year.
Challenges in the Chinese market, along with concerns surrounding its artificial intelligence initiatives, have contributed to a significant 35% decline in Tesla’s stock price in 2024, including a recent 7% drop within the past week alone.
Despite maintaining a consensus hold rating from analysts, Tesla boasts a 14-day RSI of 29.4, suggesting potential for approximately 23% upside, which could help in recovering some of its losses. Notably, Tesla’s stock faced a downturn following a downgrade by Wells Fargo to underweight from equal weight.
Similarly, Boeing is among Wall Street’s most oversold stocks. Plagued by emerging quality control issues, the aerospace company has witnessed an 8% decline in its stock price this week and a significant 30% downturn throughout the year.
Despite recording a 14-day RSI reading of 27, sentiment surrounding Boeing remains optimistic, with analysts projecting a 40% upside potential according to LSEG data.
Boeing’s challenges have had ripple effects across the airline industry, affecting companies like Southwest Airlines, which experienced an 18% dip this week due to delivery delays from Boeing. Nonetheless, analysts anticipate an upside of more than 11% for Southwest Airlines.
Also, other oversold stocks worth noting include Amgen and Globe Life, signaling potential opportunities for investors to consider.
Conversely, CNBC’s analysis also pinpoints stocks that may encounter impending pullbacks. Among the most overbought stocks in the S&P 500, Dupont De Nemours and Targa Resources stand out.
Despite registering respective 14-day RSI readings of 78 and 77.4, these stocks have witnessed significant increases in their stock prices, indicating potential for slight corrections.
Similarly, Garmin, with a 14-day RSI just below 80, along with other overbought names like Waste Management and Devon Energy, might also face downward pressure in the near term.
