Salesforce is the most overhyped stock on Wall Street during a week of market losses

The recent market sell-off has broken the winning streak for the S & P 500, but it also provides opportunities for investors to gain exposure before a potential rebound. The major averages have had losses this week, even as the Federal Reserve’s preferred inflation gauge reading was in line with expectations. The S & P 500 and the Nasdaq Composite are both set to end their five-week winning streaks, while the Dow Jones Industrial Average is on track for back-to-back weekly losses.

One of the most oversold stocks in the market this week was Dow member Salesforce, which dropped about 19% due to a revenue miss and weak guidance. CNBC Pro screened for the most overbought and oversold stocks on Wall Street based on their 14-day relative strength index (RSI). Stocks with an RSI below 30 are considered oversold, indicating a potential comeback, while an RSI above 70 suggests a stock is overbought and may pull back.

Salesforce, with a 14-day RSI of 16.4, has seen a 20% drop in shares recently. Despite disappointing quarterly results, many analysts are optimistic about the stock’s artificial intelligence prospects. Analysts predict a 37% surge in Salesforce shares. Biopharmaceutical company Bristol-Myers Squibb was also oversold this week, with shares falling more than 2% week to date and 20% in 2024. Analysts are cautious with a hold rating, but predict a potential rally of more than 29%.

On the other hand, some of the most overbought stocks this week include tech company HP, which surged 17.1% after an earnings and revenue beat in its fiscal second quarter. Despite analyst ratings, the consensus price target suggests a more than 5% fall in shares. Ralph Lauren is another overbought stock, with a nearly 7% increase for the week and a 30% rise in 2024. Analysts see more than 3% upside potential from current levels for the apparel company.

Overall, the market sell-off has created opportunities for investors to capitalize on potential rebounds in oversold stocks. Analyzing the RSI of stocks can help identify potential comeback candidates, while also being cautious of overbought stocks that may pull back. It is essential for investors to conduct thorough research and consider analyst ratings and price targets before making investment decisions in the current market environment.