As we stride into April 2024, the materials sector is lining up five stocks that could be sending a warning flare to investors who rely on momentum as a cornerstone of their investment strategy.

The Relative Strength Index (RSI), a trustworthy gauge of momentum, juxtaposes a stock’s strength on upward-moving price days against that on downward days. This index, when juxtaposed against a stock’s price performance, equips traders with a glimpse into potential short-term outcomes. A stock is deemed overbought when its RSI surpasses 70, according to Benzinga Pro.

Here’s a glance at the standout overbought contenders in the materials industry.

Arq, Inc. ARQ

• Arq reported robust fourth-quarter financials on March 12. CEO Robert Rasmus expressed satisfaction, noting, “We capped off 2023 with strong momentum.” The company’s stock surged about 99% in the last month, attaining a 52-week high of $7.26.
• RSI Value: 80.19
• ARQ Price Action: On Tuesday, Arq shares rose 7.8% to close at $7.04.

Alcoa Corporation AA

• Alcoa finalized a pivotal acquisition deal with Alumina Limited on March 11. CEO William F. Oplinger stated, “Entering into the Scheme Implementation Deed is a milestone.” The stock surged around 30% in the last month, hitting a 52-week high of $42.23.
• RSI Value: 77.99
• AA Price Action: Alcoa shares closed at $35.64 on Tuesday, up 4.8%.

Harmony Gold Mining Company Limited HMY

• Harmony Gold Mining affirmed its commitment to meet higher-end production targets on Jan. 25. The stock escalated approximately 24% in the last month, marking a 52-week high of $8.61.
• RSI Value: 76.73
• HMY Price Action: Harmony Gold Mining shares closed at $8.41 on Tuesday, reflecting a 4% increase.

Tredegar Corporation TG

• Tredegar posted a loss in the fourth quarter but expressed optimism on March 15. CEO John Steitz highlighted, “Results for the fourth quarter outperformed expectations.” The stock surged about 57% in the last month, reaching a 52-week high of $9.53.
• RSI Value: 78.03
• TG Price Action: Tredegar closed at $6.55 on Tuesday with a 2.7% increase.

Kaiser Aluminum Corporation KALU

• Kaiser Aluminum exceeded sales expectations in February. The stock surged around 28% in the last month, achieving a 52-week high of $91.47.
• RSI Value: 83.34
• KALU Price Action: Kaiser Aluminum closed at $90.89 on Tuesday, climbing 2.5%.

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