Warning Signs in the Industrials Sector: Two Stocks to Watch
As investors gear up for the new year, two industrials sector stocks are flashing warning signs that may indicate a potential downturn. These stocks, which have been riding high on momentum, may be due for a correction.
Momentum Indicators: A Key to Short-Term Performance
The Relative Strength Index (RSI) is a powerful tool for traders, providing insight into a stock’s short-term performance. By comparing a stock’s strength on up days to its strength on down days, the RSI offers a snapshot of market sentiment. When the RSI exceeds 70, it may indicate an overbought condition, signaling a potential pullback.
Boeing: A Cautionary Tale
Boeing, set to release its Q4 2024 earnings on January 28, has seen its stock surge 1% over the past month. With a 52-week high of $228.28, the company’s shares have been on a tear. However, its RSI value of 73.3 suggests that the stock may be due for a correction. On Friday, shares closed at $172.00, up 0.1% on the day.
Alaska Air: A Similar Story
Alaska Air, which has gained 9% over the past month, is another industrials sector stock flashing warning signs. With an RSI value of 76.8, the stock may be overbought. On Friday, shares closed at $68.18, up 2.9% on the day. Susquehanna analyst Christopher Stathoulopoulos recently upgraded the stock from Neutral to Positive, raising the price target from $45 to $95.
Investors, Take Note
As these two stocks approach overbought territory, investors would be wise to exercise caution. While momentum can be a powerful force, it’s essential to keep a close eye on market sentiment and adjust your strategy accordingly. With the industrials sector facing potential headwinds, it’s crucial to stay informed and adapt to changing market conditions.
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