AGNC Investment: Signs of Recovery Amid Recent Declines
AGNC Investment (AGNC) has faced significant selling pressure recently, resulting in a 19% drop over the past four weeks. However, the stock is now in oversold territory, and Wall Street analysts anticipate improved earnings reports compared to earlier forecasts.
Understanding Oversold Stocks Using RSI
To identify oversold stocks, we utilize the Relative Strength Index (RSI), a widely-used technical indicator. This momentum oscillator gauges the speed and changes in price movements.
The RSI ranges from zero to 100, with readings below 30 typically indicating that a stock is considered oversold. Every stock oscillates between overbought and oversold conditions, irrespective of fundamental qualities, making the RSI a useful tool for assessing potential price reversals.
When a stock’s price drops excessively due to unwarranted selling, investors often seek entry points to capitalize on anticipated rebounds. However, it is important to note that, like all investment tools, the RSI has limitations and should not be used in isolation for making investment decisions.
Potential for a Trend Reversal in AGNC
AGNC’s current RSI reading of 29.99 suggests that the heavy selling may be losing momentum, paving the way for a potential rebound as the stock seeks to restore the previous equilibrium of supply and demand.
Moreover, alongside technical analysis, fundamental indicators also signal a possible rebound for AGNC. Analysts covering the company have come to a consensus of increasing earnings estimates for the current year, with a 2.8% rise in the consensus EPS estimate over the past month. Typically, an upward revision in earnings estimates correlates with price appreciation in the near future.
Furthermore, AGNC holds a Zacks Rank of #2 (Buy), positioning it within the top 20% of over 4,000 ranked stocks based on trends in earnings estimate revisions and EPS surprises. This ranking provides a stronger indication of the stock’s potential for a downturn in the near term. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Zacks Highlights Top Semiconductor Stock
In other investment news, Zacks has identified a leading semiconductor stock, only 1/9,000th the size of NVIDIA, which surged over 800% since its recommendation. Although NVIDIA remains strong, this new stock appears to have significant growth potential.
With robust earnings growth and a widening customer base, it is well-positioned to meet the soaring demand driven by trends in Artificial Intelligence, Machine Learning, and the Internet of Things. Global semiconductor manufacturing is anticipated to grow from $452 billion in 2021 to $803 billion by 2028.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
