During the ongoing earnings season, the S&P 500 experienced significant volatility, reaching an intraday high of 7,501.24 on Thursday, driven by strong quarterly earnings reports. However, the index faced a pullback on Friday, particularly in technology stocks, as the market reacted negatively to the results of the U.S.-China summit.
Notably, Cisco's stock surged 22% over the week following impressive fiscal third-quarter results, pushing its relative strength index (RSI) to 90, indicating it is overbought and may be due for a correction. Other overbought stocks include Humana, Palo Alto Networks, and CVS Health.
In contrast, Zoetis emerged as the most oversold stock with an RSI of 14.4, having dropped 10% after reporting disappointing first-quarter earnings and lowering its guidance for the fiscal year. The company cited price pressures affecting pet owners, leading to reduced demand for its premium products. Other oversold stocks that could rebound include Domino's Pizza and Lululemon Athletica.
This dynamic highlights the opportunities and risks investors face as they navigate the current market landscape