QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)

Overbought Stocks (RSI)

This page lists overbought stocks according to their Relative Strength Index (RSI), which is a momentum indicator used in technical analysis. RSI measures the magnitude and speed of a public company's recent price changes to evaluate overvalued or undervalued conditions in the price of that company. Learn more about trading stocks based on RSI.

MarketRank™ evaluates a company based on dividend strength, earnings, valuation, analysts forecasts, and more.
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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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Analyst consensus is the average investment recommendation among Wall Street research analysts.
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Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PriceRSIPE RatioMarket CapVolumeAverage VolumeIndicator(s)
Natural Resource Partners L.P. stock logo
NRP
Natural Resource Partners
$89.87
-0.9%
93.047.51$1.14 billion16,37724,661Dividend Announcement
News Coverage
CrossAmerica Partners LP stock logo
CAPL
CrossAmerica Partners
$22.42
+2.1%
87.3921.15$851.29 million56,93050,159Positive News
CB Financial Services, Inc. stock logo
CBFV
CB Financial Services
$22.37
-0.7%
80.875.12$114.53 million2,6633,587Analyst Report
Analyst Revision
News Coverage
Diana Shipping Inc. stock logo
DSX
Diana Shipping
$2.93
+0.7%
80.814.58$331.30 million443,481784,388Analyst Report
Auburn National Bancorporation, Inc. stock logo
AUBN
Auburn National Bancorporation
$20.36
-2.0%
79.5150.90$71.06 million2492,348Gap Down
ZoomInfo Technologies Inc. stock logo
ZI
ZoomInfo Technologies
$15.11
-1.3%
79.4344.44$5.89 billion14.21 million6.98 millionUpcoming Earnings
Analyst Report
News Coverage
Gap Down
High Trading Volume
Happiness Development Group Limited stock logo
HAPP
Happiness Development Group
$2.21
-2.6%
79.414.60$15.37 million2,56114,340Gap Down
Zymeworks Inc. stock logo
ZYME
Zymeworks
$11.47
+1.2%
76.973.69$802.90 million583,527546,397Analyst Revision
News Coverage
Ziff Davis, Inc. stock logo
ZD
Ziff Davis
$66.52
+2.0%
76.8676.46$3.06 billion206,450230,106Positive News
Optical Cable Co. stock logo
OCC
Optical Cable
$2.68
-2.5%
76.7310.72$21.15 million3,3295,083Gap Down
Rave Restaurant Group, Inc. stock logo
RAVE
Rave Restaurant Group
$1.83
-0.5%
76.6014.08$26.70 million13,06240,928Analyst Report
Hallador Energy stock logo
HNRG
Hallador Energy
$7.56
+2.3%
76.333.22$250.54 million223,767331,799News Coverage
Positive News
North European Oil Royalty Trust stock logo
NRT
North European Oil Royalty Trust
$4.98
76.302.20$45.77 million45,74391,595
John Marshall Bancorp, Inc. stock logo
JMSB
John Marshall Bancorp
$17.26
+0.8%
76.2947.95$243.88 million14,04220,405Positive News
Western Midstream Partners, LP stock logo
WES
Western Midstream Partners
$27.97
-0.1%
76.2410.32$10.62 billion1.35 million1.08 million
Urban One, Inc. stock logo
UONE
Urban One
$3.64
-1.9%
76.1617.33$178.07 million33,12831,026
Liquidity Services, Inc. stock logo
LQDT
Liquidity Services
$15.46
-10.3%
76.0823.42$476.79 million432,941159,564Analyst Report
News Coverage
Gap Down
High Trading Volume
Steel Connect, Inc. stock logo
STCN
Steel Connect
$8.99
-1.4%
75.9614.34$56.37 million1,2213,762Gap Down
Middlefield Banc Corp. stock logo
MBCN
Middlefield Banc
$24.20
-1.7%
74.7111.31$195.78 million7,37213,158Positive News
First United Co. stock logo
FUNC
First United
$22.06
-0.8%
74.679.85$147.58 million16,19230,770Earnings Report
Positive News
Intrepid Potash, Inc. stock logo
IPI
Intrepid Potash
$17.82
-0.2%
74.5742.43$231.13 million123,429104,960Positive News
First Capital, Inc. stock logo
FCAP
First Capital
$27.75
-1.2%
74.337.25$92.96 million1,5332,583Gap Down
Gilat Satellite Networks Ltd. stock logo
GILT
Gilat Satellite Networks
$6.51
+1.2%
73.8726.04$368.60 million160,731124,483Upcoming Earnings
News Coverage
Castor Maritime Inc. stock logo
CTRM
Castor Maritime
$0.46
+1.3%
73.520.91$43.05 million192,5791.04 millionNews Coverage
Positive News
Atlanticus Holdings Co. stock logo
ATLC
Atlanticus
$32.28
+0.7%
72.897.85$470.97 million6,59210,337
Codorus Valley Bancorp, Inc. stock logo
CVLY
Codorus Valley Bancorp
$22.35
+0.2%
72.588.60$214.78 million7,74422,857
Globus Maritime Limited stock logo
GLBS
Globus Maritime
$2.16
+0.9%
72.5224.00$44.45 million21,78366,507
Anterix Inc. stock logo
ATEX
Anterix
$31.85
+3.5%
72.5179.63$597.82 million223,399105,793Upcoming Earnings
News Coverage
High Trading Volume
CACI International Inc stock logo
CACI
CACI International
$355.72
+1.3%
72.4321.55$7.93 billion138,218142,171Analyst Report
Puma Biotechnology, Inc. stock logo
PBYI
Puma Biotechnology
$5.41
+7.2%
72.3867.56$257.12 million552,506408,218Analyst Upgrade
News Coverage
Royalty Pharma plc stock logo
RPRX
Royalty Pharma
$28.70
-2.1%
72.3492.58$17.15 billion3.31 million2.44 millionUpcoming Earnings
News Coverage
SCYNEXIS, Inc. stock logo
SCYX
SCYNEXIS
$1.92
-4.0%
72.301.35$71.44 million128,312180,584Positive News
First Savings Financial Group, Inc. stock logo
FSFG
First Savings Financial Group
$16.85
-1.1%
72.0818.72$115.93 million1,2354,886Analyst Report
News Coverage
Entravision Communications Co. stock logo
EVC
Entravision Communications
$3.91
+2.4%
71.79391.39$344.08 million282,266246,962
Citizens Community Bancorp, Inc. stock logo
CZWI
Citizens Community Bancorp
$11.58
-0.7%
71.589.26$121.24 million4,6089,708Positive News
Energy Transfer LP stock logo
ET
Energy Transfer
$13.92
+0.1%
71.5813.13$43.78 billion21.22 million14.28 millionUpcoming Earnings
Options Volume
Positive News
Regional Management Corp. stock logo
RM
Regional Management
$23.13
-0.9%
71.478.60$227.37 million36,55218,732Earnings Report
Analyst Report
News Coverage
Gap Down
RCI Hospitality Holdings Inc stock logo
RICK
RCI Hospitality
$60.78
+1.5%
71.3619.42$568.90 million60,94746,421News Coverage
NuStar Energy L.P. stock logo
NS
NuStar Energy
$22.43
+0.4%
71.3143.14$2.82 billion1.72 million1.16 millionUpcoming Earnings
Positive News
Tradeweb Markets Inc. stock logo
TW
Tradeweb Markets
$101.03
+1.6%
71.1758.74$23.72 billion1.05 million1.14 millionEarnings Report
Dividend Increase
Analyst Report
News Coverage
Interlink Electronics, Inc. stock logo
LINK
Interlink Electronics
$11.67
-2.7%
71.04129.67$75.65 million4,7634,569
First US Bancshares, Inc. stock logo
FUSB
First US Bancshares
$10.40
-0.4%
70.877.82$61.05 million7,1793,647Negative News
Urban One, Inc. stock logo
UONEK
Urban One
$3.40
-0.6%
70.6116.19$166.33 million20,00220,967
Genesis Energy, L.P. stock logo
GEL
Genesis Energy
$11.18
+0.9%
70.5124.84$1.37 billion1.29 million330,405Upcoming Earnings
High Trading Volume
Bogota Financial Corp. stock logo
BSBK
Bogota Financial
$8.01
-2.3%
70.48133.52$106.77 million5,0925,541Analyst Downgrade
News Coverage
Carlyle Secured Lending, Inc. stock logo
CGBD
Carlyle Secured Lending
$14.86
+0.1%
70.3911.01$754.74 million147,335195,475Positive News
Burlington Stores, Inc. stock logo
BURL
Burlington Stores
$199.95
+3.0%
70.3743.95$12.90 billion923,114811,706
The ONE Group Hospitality, Inc. stock logo
STKS
ONE Group Hospitality
$3.93
-1.3%
70.3326.20$122.89 million79,170113,729News Coverage
Monroe Capital Co. stock logo
MRCC
Monroe Capital
$7.29
+0.1%
70.0645.57$157.97 million59,30873,274
KLX Energy Services Holdings, Inc. stock logo
KLXE
KLX Energy Services
$8.95
+1.9%
70.003.10$146.87 million93,780106,429Positive News
Gap Down
Vector Group Ltd. stock logo
VGR
Vector Group
$9.90
-1.6%
69.939.08$1.54 billion2.91 million928,612Upcoming Earnings
News Coverage
Positive News
High Trading Volume
Grupo Aeroportuario del Pacífico, S.A.B. de C.V. stock logo
PAC
Grupo Aeroportuario del Pacífico
$165.11
-0.7%
69.7416.25$8.34 billion65,26355,110
OptimumBank Holdings, Inc. stock logo
OPHC
OptimumBank
$4.03
-1.3%
69.635.30$29.22 million3,64710,372News Coverage
Gap Up
XPEL, Inc. stock logo
XPEL
XPEL
$52.63
+1.1%
69.5529.73$1.45 billion97,000134,116Positive News
Grupo Aeroportuario del Sureste, S. A. B. de C. V. stock logo
ASR
Grupo Aeroportuario del Sureste, S. A. B. de C. V.
$313.00
-1.1%
69.4216.53$9.39 billion124,19659,421News Coverage
High Trading Volume
Citizens Holding stock logo
CIZN
Citizens
$7.89
+1.2%
69.1923.91$44.26 million9,36013,632
Haverty Furniture Companies, Inc. stock logo
HVT
Haverty Furniture Companies
$34.39
+1.8%
69.128.93$559.53 million56,32583,223
Kirby Co. stock logo
KEX
Kirby
$84.49
+0.2%
68.9222.71$4.99 billion359,274382,629Earnings Report
Analyst Report
Insider Selling
Small Cap US Equity Select ETF stock logo
RNSC
Small Cap US Equity Select ETF
$27.84
+1.2%
68.9011.41$34.80 million7,19811,967News Coverage
Tactile Systems Technology, Inc. stock logo
TCMD
Tactile Systems Technology
$15.12
+1.3%
68.8914.00$355.32 million116,440234,513News Coverage
SurgePays, Inc. stock logo
SURG
SurgePays
$8.08
-1.7%
68.755.57$136.88 million1.19 million777,270
MEI Pharma, Inc. stock logo
MEIP
MEI Pharma
$4.60
+2.0%
68.750.74$30.64 million11,00923,619Analyst Report
News Coverage
Permianville Royalty Trust stock logo
PVL
Permianville Royalty Trust
$1.61
+3.9%
68.433.83$53.13 million48,417124,123
Enterprise Products Partners L.P. stock logo
EPD
Enterprise Products Partners
$26.25
68.3710.42$57.01 billion5.23 million5.58 millionEarnings Report
Analyst Report
BWX Technologies, Inc. stock logo
BWXT
BWX Technologies
$83.84
-0.1%
68.2534.36$7.67 billion322,095449,204
F&G Annuities & Life, Inc. stock logo
FG
F&G Annuities & Life
$45.51
-0.2%
68.0640.27$5.71 billion111,895108,966News Coverage
Dominion Energy, Inc. stock logo
D
Dominion Energy
$44.18
-0.7%
67.6922.54$36.97 billion4.02 million4.53 millionPositive News
Takeda Pharmaceutical Company Limited stock logo
TAK
Takeda Pharmaceutical
$14.00
-1.3%
67.5521.21$44.31 billion972,6132.10 million
Ultralife Co. stock logo
ULBI
Ultralife
$7.19
+5.0%
67.4527.65$117.49 million21,09845,478Upcoming Earnings
News Coverage
Positive News
RNDV
First Trust S&P 500 Diversified Dividend Aristocrats ETF
$29.51
-0.1%
67.1712.43$28.03 million3,2272,223
Danaos Co. stock logo
DAC
Danaos
$74.04
-1.5%
67.142.57$1.51 billion150,793123,055Upcoming Earnings
News Coverage
Positive News
Ituran Location and Control Ltd. stock logo
ITRN
Ituran Location and Control
$25.59
+0.2%
67.1311.27$508.99 million57,32343,282
Biglari Holdings Inc stock logo
BH.A
Biglari
$762.00
-2.3%
66.9611.50$1.74 billion118120
Magyar Bancorp, Inc. stock logo
MGYR
Magyar Bancorp
$11.55
+1.5%
66.909.79$76.92 million3,7534,078News Coverage
Franklin Covey Co. stock logo
FC
Franklin Covey
$39.29
-0.5%
66.8330.46$522.16 million41,27099,469Analyst Upgrade
News Coverage
Utah Medical Products, Inc. stock logo
UTMD
Utah Medical Products
$74.18
+0.3%
66.8116.23$269.27 million22,28713,796Dividend Announcement
Costamare Inc. stock logo
CMRE
Costamare
$11.01
+0.9%
66.623.01$1.29 billion813,981540,944Earnings Report
News Coverage
Sunoco LP stock logo
SUN
Sunoco
$60.71
+0.8%
66.4810.92$6.10 billion4.80 million709,881Upcoming Earnings
High Trading Volume
PrimeEnergy Resources Co. stock logo
PNRG
PrimeEnergy Resources
$95.90
+0.9%
66.417.12$174.54 million4911,929
Credicorp Ltd. stock logo
BAP
Credicorp
$152.10
-1.4%
66.339.87$12.10 billion229,708190,730Analyst Report
News Coverage
Mammoth Energy Services, Inc. stock logo
TUSK
Mammoth Energy Services
$3.75
+7.8%
66.1323.44$179.78 million42,01071,756Positive News
Global Self Storage, Inc. stock logo
SELF
Global Self Storage
$4.33
+0.5%
66.0721.65$48.24 million19,13229,516
Profire Energy, Inc. stock logo
PFIE
Profire Energy
$1.46
-0.7%
65.997.68$69.48 million89,238172,601Positive News
Alpha Metallurgical Resources, Inc. stock logo
AMR
Alpha Metallurgical Resources
$370.91
+2.7%
65.797.54$5.63 billion131,089208,518Positive News
Star Bulk Carriers Corp. stock logo
SBLK
Star Bulk Carriers
$22.94
+0.5%
65.7110.62$2.37 billion1.13 million1.16 millionUpcoming Earnings
News Coverage
ARC Document Solutions, Inc. stock logo
ARC
ARC Document Solutions
$2.95
+1.0%
65.3711.80$126.73 million64,852142,013
OFS Capital Co. stock logo
OFS
OFS Capital
$11.49
-1.5%
65.2625.53$153.97 million15,85038,102
Kura Sushi USA, Inc. stock logo
KRUS
Kura Sushi USA
$102.62
+3.5%
65.22789.45$1.15 billion73,036140,764Positive News
Security National Financial Co. stock logo
SNFCA
Security National Financial
$7.99
-0.6%
65.215.54$183.61 million12,46830,232Gap Down
ONEOK, Inc. stock logo
OKE
ONEOK
$68.97
+0.6%
64.7912.66$40.18 billion2.52 million3.05 million
Jiayin Group Inc. stock logo
JFIN
Jiayin Group
$5.11
+1.2%
64.751.32$274.36 million20,35999,206
J.Jill, Inc. stock logo
JILL
J.Jill
$25.17
+1.3%
64.6811.19$266.80 million33,88178,410
Dropbox, Inc. stock logo
DBX
Dropbox
$32.78
-0.3%
64.6020.62$11.33 billion2.58 million2.79 millionUpcoming Earnings
California Resources Co. stock logo
CRC
California Resources
$53.63
+0.8%
64.478.61$3.68 billion1.27 million646,158Analyst Report
Analyst Revision
News Coverage
PBF Energy Inc. stock logo
PBF
PBF Energy
$52.87
+0.6%
64.462.44$6.46 billion1.75 million2.30 millionUpcoming Earnings
News Coverage
Yiren Digital Ltd. stock logo
YRD
Yiren Digital
$4.58
-1.9%
64.201.46$405.83 million46,304187,836News Coverage
Positive News
Euroseas Ltd. stock logo
ESEA
Euroseas
$40.49
-1.9%
64.172.57$283.84 million51,13457,957News Coverage
Kimco Realty Corp stock logo
KIM
Kimco Realty
$20.02
-0.7%
63.8828.20$12.41 billion7.30 million6.38 million
Red Violet, Inc. stock logo
RDVT
Red Violet
$17.83
+0.2%
63.8119.81$248.55 million53,02219,345High Trading Volume
Sterling Infrastructure, Inc. stock logo
STRL
Sterling Infrastructure
$82.30
+3.4%
63.7419.60$2.54 billion369,281377,096Positive News

Overbought Stocks Explained: Should You Trade Them?

Overbought stocks refer to the actual value of a company or an asset compared to its market value; they are those that trade at a price above their intrinsic or fair value. It's typically expected that the market will correct and they will move lower. On the opposite end of the spectrum, oversold stocks trade below their true value and should rise higher. 

In some situations, stocks, exchange-traded funds (ETFs), options, forex and commodities can stay overbought or oversold for a while prior to a reversal. 

In this article, we'll take a look at overbought stocks and analyze the environment for overbought stocks. We'll also explore why or why not overbought stocks may make a good investment. We'll also help you analyze several examples of overbought stocks as well.

There's a lot to learn about overbought stocks, so let's get going. By the time you're done reading, you'll have a better idea of how to handle overbought stocks and whether you should attempt to trade them yourself.

As mentioned before, overbought stocks are those that trade at a level above fair value. When a stock becomes overbought, it's heading for a retreat — they tend to rubber band back after they get too far away from their longer term trend line. Recent or short-term movement in the price of the security shows that it's likely that the price will correct in the future. You can use different forms of analysis to learn estimates of a stock’s value.

When you engage in technical analysis, it involves identifying trends and patterns through charts in order to evaluate investments and trading opportunities. Overbought stocks can be fundamentally overbought or technically overbought. You can identify technically overbought stocks based on price action and historical data rather than fundamental analysis. Fundamentally overbought stocks can be identified based on the company's financial statements. 

How can you tell if a particular stock is overbought? 

You can use the Relative Strength Index (RSI), one of the most common ways to measure price momentum. The RSI is a momentum oscillator which measures the speed and change of price movements. The RSI ranges from zero to 100 and you can determine whether a stock is either overbought or oversold by charting the ratio of these higher closes to show you the velocity of the move. 

When the RSI becomes overbought, the price rises too high too quickly, which usually leads to a downside correction. On the flip side, when it becomes oversold, the price drops too low too quickly and you'll see an increase going the other direction. You can consider the RSI extremely overbought when it has a value above 80. 

Let's take a look at a few ways you can identify overbought stocks, including using Bollinger Bands, the stochastic oscillator, the price-to-earnings (P/E) ratio, Fibonacci retracement levels and Moving Average Convergence/Divergence (MACD) oscillator:

  • Bollinger Bands: Bollinger Bands are a popular trading tool that define upper and lower price range levels. They're used in pairs (both upper and lower bands) relative to a moving average.
  • The stochastic oscillator: The stochastic oscillator, also called the scholastic indicator, is a popular technical analysis tool that shows momentum. It compares the security of a closing price to a range of prices over a certain time period. The stochastic oscillator measures from zero to 100 in bands.
  • The price-to-earnings (P/E) ratio: The P/E ratio shows how much a company is worth. You can calculate it by checking into the stock price divided by the company's earnings per share over a period of time, such as the past 12 months. 
  • Fibonacci retracement levels: Fibonacci retracement levels take an extreme high and low on a stock chart and divide the distance between the two using certain Fibonacci ratios (23.6%, 38.2%, 50%, 61.8% and 100%). Horizontal lines on a chart indicate potential areas of support and resistance.
  • Moving Average Convergence/Divergence (MACD) oscillator: The MACD shows how two exponential moving averages (EMAs) are related, particularly the 26-day moving average and the 12-day moving average. As a trader, you subtract the longer average from the shorter average to show the trend of the price action for the underlying security as well as the buying and selling momentum. Traders can look for signal line crossovers, centerline crossovers and divergences between the MACD line to understand when to buy and when to sell.

Ultimately, a stochastic value of 80 or above indicates an extremely overbought stock, while values of 20 or lower indicate that a stock is oversold. If you're debating whether or not to take action on a stock, it's a good idea to take a look at all these indicators to find out whether a stock is overbought.

An overbought stock doesn't trade at its true worth. Instead, it's trading over what it should. When a stock price rises too far (at a pace that is too fast and starts to look expensive to just about any trader) it is considered overbought. However, this means that the stock is doing something right in order to grab this much attention.

Good news can trigger buying interest through resistance which means that it will trigger an upswing in the stock. However, if news has been anticipated, the release could trigger profit taking. Ultimately, it's important to remember that the stock may not necessarily decline.

Traders should look for RSI values around 30 or which fall below that level, which indicates a level that is undervalued. It may be hard to get your head wrapped around a high RSI (strong short term momentum) because they are rising and may seem overpriced — you likely want completely undervalued stocks, right? However, a high RSI indicates that investors have continued to buy and that the rise will continue going up.

Let's take a look at a couple of overbought stocks as examples to help you decide whether certain overbought stocks deserve a spot in your portfolio. 

Natural Resource Partners L.P., headquartered in Houston, owns, manages and leases mineral properties in the United States through its two segments, Mineral Rights and Soda Ash. The company owns interests in the following: 

  • Coal (the company's coal reserves are located in Appalachia, the Illinois Basin and the Northern Powder River Basin)
  • Soda ash (the company's soda ash refinery is located in the Green River Basin, Wyoming)
  • Trona ore (the company's trona ore mining operation is located in the Green River Basin, Wyoming)
  • Other natural resources

The company's oil and gas properties are located in Louisiana while timber assets are located in West Virginia. The company leases a portion of its reserves in exchange for royalty payments. Plus, it owns and leases transportation and processing infrastructure related to coal properties. 

TravelCenters of America Inc. operates travel centers, truck service facilities, and restaurants in the United States and Canada. TravelCenters of America Inc. offers the following products and services:

Diesel fuel and gasoline as well as non fuel products and services — these non fuel products and services include truck repair and maintenance services, diesel exhaust fluids, full service restaurants, quick service restaurants as well as other customer amenities.

It has several full and quick service restaurants, such as:

  • Iron Skillet
  • Country Pride
  • IHOP
  • Black Bear Diner
  • Fuddruckers
  • Bob Evans
  • Popeye's Chicken & Biscuits
  • Subway
  • Burger King
  • Taco Bell
  • Pizza Hut
  • Dunkin' Donuts 
  • Starbucks Coffee

The company's travel stores also offer general merchandise such as the following:

  • Electronics
  • Oil and additives
  • Hardware and tools
  • Clothing
  • Cab and bunk supplies
  • Convenience products (cold beverages, candy, salty snacks, sweet treats, grocery items, meal solutions, pet supplies, health and beauty products, fresh food, pre-packaged meal solutions, snacks, freshly brewed coffee, cold fountain drinks and gifts and regional souvenirs) 

The company operated 276 travel centers under the TravelCenters of America, TA, TA Express, Petro Stopping Centers and Petro brand names in 44 states as well as in the province of Ontario, Canada. It also has three truck service facilities operated under the TA Truck Service brand name and one restaurant. It serves trucking fleets and its drivers, independent truck drivers, highway and local motorists and casual diners. 

If you think you might want to invest in overbought stocks, what is the correct approach? Let's take a look at how to analyze, open a brokerage account and buy shares.

As already mentioned, you can use a wide variety of trading tips to identify overbought stocks. You can use the stochastic oscillator to take a look at recent price movements and learn about a stock’s momentum and pricing trend. The stochastic oscillator laid the yellow brick road for the RSI, which you can figure using this formula:

RSI = 100−100/(1+RS)RSI = 100−100/(1+RS)

In all of your calculations, do you see a high RSI (above 70)? If so, it immediately tells you that a stock is overbought and it can also help you anticipate market corrections in the stock in the short term. You may also prefer to use  Bollinger Bands against the RSI. 

Are you identifying a stock with a high RSI and a price that goes toward the high end of an upper Bollinger Band? You can consider that particular stock to be overbought.

Do you have a trading account? If you don't already have a trading account, choose the right option for you and fund your account. Take a look at the fees involved, the platform that the robo-advisor uses (if you choose to go that route) and other things that you believe you need in order to successfully invest. 

Once you've set up your trading account, consider using paper trading before you start officially trading. Paper trading allows you to practice using a fake account with fake money. If you've never traded before, you may want to spend a chunk of time learning how to trade on a paper trading account before you officially get started.

Once you're ready to start trading, choose the right stocks that you believe will meet your goals based on the RSI, Bollinger Bands, the stochastic oscillator, the price-to-earnings (P/E) ratio, Fibonacci retracement levels and Moving Average Convergence/Divergence (MACD) oscillator — whatever you choose to use. Also think long and hard about how much money you can afford to lose when trading. Never trade more than you can afford to lose on a one-time or regular basis. Knowing the risks of trading ahead of time can help you reach your full trading potential. 

Melissa Brock

About Melissa Brock

  • brockm1@central.edu

Associate Editor & Contributing Author

Dividend Stocks, Retirement

Experience

Melissa Brock has been an associate editor & contributing writer for MarketBeat since 2021.

While working in college admission, Melissa Brock pursued a freelance writing and editing career. She currently works as a full-time freelance writer and financial editor covering higher education, investing, personal finance, mortgages, college savings, insurance, and more. 

She developed her website, College Money Tips, to help families navigate the college journey. She connects with a wide-reaching audience through her site, through an upcoming digital course, and the myriad of publications for which she writes. Melissa graduated summa cum laude with a bachelor of arts in communication studies with minors in psychology and Spanish from Central College. She's a longtime member of the National Association of College Admission Counseling (NACAC).

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