The S&P 500 index ended a three-week winning streak with a 1.4% loss for the week, despite a 0.4% gain on Friday. The decline was largely attributed to a rise in Treasury yields, especially for longer-dated bonds, which triggered a sell-off in the broader market.
However, some stocks performed exceptionally well, entering overbought territory as indicated by their relative strength index (RSI) readings above 70. Notably, Moderna's shares surged 129% after announcing promising results from a late-stage trial of a personalized cancer vaccine, while Merck's stock rose 12% with an RSI of 77.
Estée Lauder also saw significant gains, with an 18% increase following strong quarterly earnings and an optimistic outlook for fiscal 2027, raising its adjusted operating margin forecast. Other overbought stocks included Agilent Technologies and Thermo Fisher Scientific, both of which have buy ratings from analysts.
Investors should be cautious with these overbought stocks, as they may be more susceptible to price corrections