Top 4 Materials Stocks That May Plunge This Quarter
Portfolio Pulse from Lisa Levin
Four materials sector stocks are considered overbought based on their Relative Strength Index (RSI) values, which may signal a potential short-term decline. Mercer International Inc. (MERC), Smith-Midland Corporation (SMID), Berry Global Group, Inc. (BERY), and Axalta Coating Systems Ltd. (AXTA) have RSI values above 70, indicating they might be overbought. Despite reporting better-than-expected financial results, their high RSI readings suggest they could face a pullback.
November 22, 2023 | 12:00 pm
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NEGATIVE IMPACT
Axalta Coating's RSI of 71.69 suggests overbought status. The company reported a 5.7% sales increase but saw a marginal share price decrease.
Axalta's high RSI and slight share price drop could indicate that the stock's recent gains might not be sustainable in the short term.
CONFIDENCE 65
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Berry Global's RSI of 71.54 indicates overbought conditions. Despite exceeding earnings expectations, the stock experienced a slight drop.
Berry Global's RSI suggests the stock may be due for a pullback, especially after a minor decline following a positive earnings report.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 75
NEGATIVE IMPACT
Mercer International's RSI of 71.19 suggests it may be overbought despite reporting better Q3 results with lower costs. The stock recently rose 6.8%.
The RSI above 70 typically indicates a stock is overbought, which could lead to a short-term price decline as traders may consider taking profits.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Smith-Midland's RSI of 83.58 is significantly overbought. Despite a 31% revenue increase, shares fell 1.4%, signaling potential further decline.
An RSI significantly above 70, as in the case of SMID, often leads to a correction. The recent drop in share price may precede further declines.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85