The consumer staples sector has seen a surge in overbought stocks, presenting an opportunity to consider shorting these potentially overvalued companies. By analyzing the Relative Strength Index (RSI), a momentum indicator that compares a stock’s strength on up days versus down days, traders can gain insight into how a stock may perform in the short term. Stocks with an RSI above 70 are typically considered overbought.
FitLife Brands, Inc. (NASDAQ: FTLF)
- FitLife Brands recently received approval from the U.S. Bankruptcy Court for the $18.5 million acquisition of substantially all of the assets of MusclePharm.
- The company’s stock currently has a 52-week high of $22.74.
- RSI Value: 70.28
- FTLF Price Action: Shares of FitLife Brands fell 1.9% to close at $22.01 on Tuesday.
Almacenes Éxito S.A. (NYSE: EXTO)
- Almacenes Éxito S.A. has seen its stock rise by over 25% in the past month.
- The company’s stock has a 52-week high of $7.00.
- RSI Value: 74.60
- EXTO Price Action: Shares of Almacenes Éxito fell 0.4% to close at $6.96 on Tuesday.
Blue Apron Holdings, Inc. (NASDAQ: APRN)
- Blue Apron Holdings recently announced an agreement to be acquired by Wonder Group for $13 per share.
- The company currently has a 52-week high of $28.80.
- RSI Value: 76.90
- APRN Price Action: Shares of Blue Apron gained 0.1% to close at $12.96 on Tuesday.
Hostess Brands, Inc. (NASDAQ: TWNK)
- J. M. Smucker plans to acquire Hostess Brands for $34.25 per share, representing a total enterprise value of $5.6 billion.
- The company’s 52-week high is $33.74.
- RSI Value: 70.66
- TWNK Price Action: Shares of Hostess Brands rose 0.1% to close at $33.40 on Tuesday.
It’s important to closely monitor these stocks as they may experience a potential downward correction due to their overbought status. Keep an eye on their RSI values and price actions to make informed trading decisions.
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