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Warning Signs in the Tech Sector Warning Signs in the Tech Sector

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    Warning Signs in the Tech Sector


The information technology sector is rife with stocks that could be signaling a warning to investors who prioritize momentum in their trading decisions.

The relative strength index (RSI) measures a stock’s momentum by comparing its strength on up days to its strength on down days. It provides traders with insights into short-term stock performance. When the RSI exceeds 70, the asset is generally considered overbought, according to Benzinga Pro.

Here’s a rundown of major overbought players in the tech sector:

SoundHound AI, Inc. SOUN

  • On Feb. 14, Nvidia reported a 1.73 million share stake in SoundHound AI. The company’s stock gained around 68% over the past month and has a 52-week high of $5.11.
  • RSI Value: 83.13
  • SOUN Price Action: Shares of SoundHound AI gained 1.4% to close at $3.8108 on Friday.

AppLovin Corporation APP

  • On Feb. 14, AppLovin reported better-than-expected fourth-quarter financial results. The company’s stock gained around 28% over the past five days and has a 52-week high of $60.65
  • RSI Value: 77.91
  • APP Price Action: Shares of AppLovin gained 2.3% to close at $59.87 on Friday.

Applied Materials, Inc. AMAT

  • On Feb. 15, Applied Materials reported better-than-expected first-quarter financial results. “Applied Materials delivered strong results in the first quarter of fiscal 2024 and has outperformed our markets for the fifth consecutive year,” said Gary Dickerson, CEO of Applied Materials. The company’s stock gained around 19% over the past month and has a 52-week high of $206.77.
  • RSI Value: 76.00
  • AMAT Price Action: Shares of Applied Materials gained 6.4% to close at $199.57 on Friday.

Pixelworks, Inc. PXLW

  • On Feb. 8, Pixelworks posted a wider-than-expected fourth quarter loss. “Our fourth quarter results marked a strong finish to the year, which was highlighted by the continued momentum and significant growth of our mobile business,” stated Todd DeBonis, President and CEO of Pixelworks. The company’s stock jumped around 98% over the past month and has a 52-week high of $2.92.
  • RSI Value: 78.54
  • PXLW Price Action: Shares of Pixelworks gained 4.2% to close at $2.71 on Friday.

 

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