Identifying Oversold Stocks in the Financial Sector: Opportunities Await

Current market conditions have led to some financial stocks being labeled as oversold, presenting potential buying opportunities for investors.

The Relative Strength Index (RSI) serves as a valuable momentum indicator. By comparing a stock’s performance on days with price increases versus days with decreases, traders gain insights about possible short-term movements. Typically, a stock is deemed oversold when its RSI falls below 30, as reported by Benzinga Pro.

Here’s a closer look at notable oversold stocks in the financial sector, characterized by RSIs near or below 30.

Horizon Technology Finance Corp HRZN

On Oct. 29, Horizon Tech Finance released disappointing quarterly results. “We had a solid third quarter, as we originated a number of new, high-quality loans that returned our portfolio to quarter-over-quarter growth, while we saw the venture debt market begin to improve,” stated Robert D. Pomeroy, Jr., CEO of Horizon. Over the past week, the company’s stock declined approximately 9%, reaching a 52-week low of $8.50.
RSI Value: 14.14
HRZN Price Action: Horizon Technology Finance shares fell 6.6% to close at $8.57 on Monday.
Benzinga Pro’s real-time newsfeed provided updates on HRZN.

Pennantpark Floating Rate Capital Ltd PFLT

On Dec. 12, PennantPark Floating Rate Capital announced an increase in their joint venture investment. PFLT and their partner plan to allocate an additional $100 million in capital toward PSSL. The stock has fallen about 3% in the past week and has a 52-week low of $10.28.
RSI Value: 28.02
PFLT Price Action: Shares of Pennantpark Floating Rate Capital decreased by 1%, closing at $10.81 on Monday.
Benzinga Pro’s charting tool successfully identified trends in PFLT stock.

Principal Financial Group Inc PFG

On Dec. 11, analyst Elyse Greenspan from Wells Fargo downgraded Principal Financial from Equal-Weight to Underweight, adjusting the price target down from $84 to $75. Over the last month, the stock has dropped nearly 9%, with a 52-week low of $72.21.
RSI Value: 26.47
PFG Price Action: Shares of Principal Financial fell 0.3%, closing at $78.67 on Monday.
Benzinga Pro’s signals feature indicated a potential breakout for PFG shares.