"Nasdaq 100's Most Overbought Stocks" (QQQ; STX; AKAM)
From Forbes:
Close proximity to technically overbought levels means that these
fast-gaining Nasdaq 100 stocks carry high risk at current levels, and
shareholders should now lock in hard-earned profits.
As Apple Inc. (AAPL) surges above the $500 level and Wall Street analysts bump their price targets for the S&P to 1400 or 1450, it continues to indicate a market where risk is increasing.
This is opposite of last fall, when the major firms were lowering
their forecasts for both the S&P 500 and US GDP at a rapid rate.
This was pointed out in the September 23 Week Ahead column, “Is the Majority Wrong?”
Though I can eventually see the S&P 500 reaching 1400 or 1450
sometime in 2012, I don’t expect it in the near future. In looking for
stocks to buy, there are currently so many that seem to be quite
overextended, and I am not finding many opportunities at present levels.
The Nasdaq 100 has been leading the market higher, as the PowerShares QQQ Trust (QQQ) is up 12.9% so far in 2012. Even though QQQ is still 8%-9% below its next major Fibonacci price target, it is important to take note of the overbought status of the individual stocks that make up the Nasdaq 100.
Click to Enlarge
The table above lists Nasdaq 100 stocks that
are closest to their weekly Starc+ bands. As I have noted in the past,
when a stock is close to its weekly Starc+ band, it is a high-risk time
to buy (see “Buy, Sell, or Wait: A Way to Decide”).
The most overbought stock is Seagate Technology (STX),
which is currently 2% above its weekly Starc+ band. In fact, the five
most overbought stocks on the list are either at or above their weekly
Starc+ bands.
Other stocks listed are also very close to their weekly Starc+ bands. For example, Akamai Technologies Inc. (AKAM) is listed at -2%, which means it is just 2% below its weekly Starc+ band.
Other stocks listed are also very close to their weekly Starc+ bands. For example, Akamai Technologies Inc. (AKAM) is listed at -2%, which means it is just 2% below its weekly Starc+ band.
We can also see the percentage by which each stock is above or below its 200-day moving average (MA). Seagate Technology (STX), which was featured last week in “3 Stocks You Shouldn’t Buy Now,”
is 69% above its 200-day MA, which currently sits at $15.50. This is
consistent with a very overextended condition, and I continue to suggest
selling, not buying, when a stock is this overextended....MORE
