As of March 19, 2024, investors in the technology sector may want to exercise caution as several stocks show signs of potential volatility in the near term. Momentum traders, in particular, should take heed of the following indicators, which suggest that these stocks may be overbought.
The Relative Strength Index (RSI) is a momentum indicator commonly used by traders to assess whether a stock is overbought or oversold. When the RSI exceeds 70, it typically indicates that the stock is overbought, potentially signaling a reversal in its price trend.
Here are four tech stocks currently exhibiting high RSI values:
1. Veritone, Inc. (NASDAQ: VERI)
Veritone recently reported strong fourth-quarter revenue results and provided optimistic guidance for the first quarter of 2024. The company’s stock has surged approximately 69% over the past five days, reaching a 52-week high of $6.03.
RSI Value: 77.40
Price Action: Shares of Veritone closed at $3.88 on Friday, reflecting a gain of 42.1%.
2. SoundHound AI, Inc. (NASDAQ: SOUN)
SoundHound AI reported weaker-than-expected fourth-quarter financial results, yet its stock has seen a notable increase of around 52% over the past five days, reaching a 52-week high of $10.25.
RSI Value: 76.17
Price Action: Shares of SoundHound AI closed at $8.91 on Friday, marking a gain of 6.5%.
3. MicroStrategy Incorporated (NASDAQ: MSTR)
MicroStrategy announced the pricing of its offering of convertible senior notes on March 15. Despite this development, its stock has surged approximately 153% over the past month, reaching a 52-week high of $1,815.00.
RSI Value: 72.76
Price Action: Shares of MicroStrategy closed at $1,782.36 on Friday, reflecting a gain of 6.3%.
4. Arlo Technologies, Inc. (NYSE: ARLO)
Arlo Technologies reported better-than-expected fourth-quarter financial results, leading to a significant increase in its stock price of around 40% over the past month. The company’s 52-week high is $12.50.
RSI Value: 74.44
Price Action: Shares of Arlo Technologies closed at $12.26 on Friday, marking a gain of 1.3%.
While these stocks have experienced recent gains, their elevated RSI values suggest that they may be prone to pullbacks or corrections in the near future. Investors should conduct thorough research and consider their risk tolerance before making any investment decisions.
