According to the technical analysis of over 4,400 publicly traded U.S. companies with a market cap exceeding $100 million, three firms signal a potential trend reversal amid overbought conditions.
What Happened: QuantumScape Corp. (NYSE:QS), Cogent Biosciences Inc. (NASDAQ:COGT), and Opendoor Technologies Inc. (NASDAQ:OPEN) are exhibiting a rare overbought signal, suggesting that these stocks may be primed for a correction. While the charts of these three stocks painted a positive picture, only one metric signalled caution.
The relative strength index or RSI, a widely used momentum indicator, ranges from 0 to 100, with readings below 30 signalling an oversold condition.
Whereas readings above 70 typically indicate overbought conditions and readings above 90 signal extreme overextension, often preceding reversals.
QuantumScape Corp.
According to Benzinga Pro, QS had an RSI of 90.92. Other technical metrics, like its share price, were above its short and long-term simple daily moving averages (SMA). While its MACD line of 2.10 was above its signal line, all pointing toward bullish trends.
Cogent Biosciences Inc.
Apart from COGT’s RSI at 90.74, its SMAs were above its current share price, and its MACD line of 1.48 was also positive, all indicating a bullish trend.
Opendoor Technologies Inc.
With an RSI of 90.82, OPEN’s price trend and MACD metric were also positive, signaling a bullish trend.
The anonymous derivatives investor known as Heisenberg (@Mr_Derivatives) wrote on X, “Extrapolate how you see fit.”
Why It Matters: This one indicator could mean volatility ahead for QS, a battery technology innovator; COGT, a biotech firm developing precision therapies; and OPEN, a real estate tech platform.
QuantumScape stock ended 7.65% higher at $14.64 apiece on Friday. The stock has risen by 164.26% on a year-to-date basis and 84.15% over the past year. Meanwhile, Cogent Biosciences ended up 2.38% at $12.49 apiece on Friday with a 60.13% YTD gain and 43.73% return over the past year.
On the other hand, Opendoor Technologies stock surged 36.36% to $2.25 per share on Friday with 41.51% YTD returns but was lower by 10.71% over the past year.
In premarket on Monday, QS was up dropped 3.96%, COGT advanced 2.00% and OPEN surged 19.11%.
Benzinga Edge Stock Rankings shows that OPEN had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid, and its value ranking was also good at the 76.19th percentile. The details of other metrics, along with QS and COGT’s rankings, are available here.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Monday. The SPY was down 0.27% at $629.30, while the QQQ advanced 0.30% to $562.96, according to Benzinga Pro data.
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