Benzinga - by Lisa Levin, Benzinga Editor.
The most overbought stocks in the consumer discretionary sector presents an opportunity to go short on these overvalued companies.
The RSI is a momentum indicator, which compares a stock's strength on days when prices go up to its strength on days when prices go down. When compared to a stock's price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70.
Here’s the latest list of major overbought players in this sector.
AMMO, Inc. (NASDAQ: POWW)
- AMMO posted a profit for the first quarter. Jared Smith, AMMO’s CEO, commented “Our work toward achieving our strategic goals are starting to pay off as we have already begun to see the positive effects here in the 1st quarter, with significant improvements in gross margin and strong cash flow.” The company’s stock has a 52-week high of $3.35. .
- RSI Value: 73.63
- POWW Price Action: Shares of AMMO closed at $2.64 on Friday.
- Smith & Wesson's board authorized a new buyback of up to $50 million. “With the bulk of our investment in the move of our headquarters and significant elements of our operations to Tennessee soon coming to an end, we intend to rebalance our capital allocation strategy towards returning excess capital to our stockholders. This stock repurchase program is a key element of that strategy," said Mark Smith, CEO of Smith & Wesson. The company’s stock has a 52-week high of $14.55.
- RSI Value: 72.93
- SWBI Price Action: Shares of Smith & Wesson Brands fell 0.9% to close at $13.97 on Friday.
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E-Home Household Service Holdings Limited - The company’s stock jumped around 65% over the past month. The company has a 52-week high of $150.00.
- RSI Value: 77.94
- EJH Price Action: Shares of E-Home Household Service fell 1.2% to close at $1.70 on Friday.
- Chico’s FAS announced a definitive agreement to be acquired by private equity firm Sycamore Partners for $1 billion. The company’s 52-week high is $7.53.
- RSI Value: 80.45
- CHS Price Action: Shares of Chico's FAS closed at $7.49 on Friday.
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