Stocks riding the wave of China’s stimulus higher this week may be headed lower. Last week, the People’s Bank of China announced support measures, including cutting the amount of cash banks must hold, in an effort to boost the country’s weakening economy. Chinese stocks have eased since then, with the mainland’s CSI 300 index up more than 25% for nine straight days. The index rose more than 8% on Monday, its best one-day performance in 16 years. US stocks tied to China have also been swept up in the rally. Shares of Wynn Resorts and Las Vegas Sands have gained nearly 8% and more than 2% this week, respectively. But commonly used measures indicate that these names can now be considered overbought, meaning they will become cheaper. Stocks with a 14-day relative strength index reading, or RSI, above 70 are considered overbought. On the other hand, a reading below 30 means the stock is oversold and may be due for a rebound. CNBC Pro used the stock screener tool to find the most overbought and oversold stocks on Wall Street, listed below: Casino operator Las Vegas Sands is a China-linked name that has jumped nearly 7% in 2024. The stock has read RSI 82 UBS analyst Robin Farley downgraded the stock to a neutral from a buy rating in August, saying the company’s recovery in the Macau market could be an uphill battle. “Macau will likely continue to expand further, but do not see a step change until the economic outlook for the mass market customer improves,” wrote the analyst. “Given the economic outlook in mainland China, we now believe that the extent of the Macau market may not recover in the near future as previously expected.” Fellow China play Wynn Resorts has also read a high RSI of 86. Shares are up 15% in 2024. Artificial Intelligence and data center power play Vistra is also listed with an RSI of 84. With a 2024 advance of 260%, Vistra is the best stock in the S&P 500 year this. Seaport Research Partners analyst Angie Storozynski cut her 2025-2028 earnings expectations for Vistra, pointing to “a lower forward power curve and a more gradual ramp from future co-location deals.” However, he raised the 2024 estimate for the power generation company. On the other hand, health insurer Humana, with an RSI of only 14, is among the most oversold stocks on Wall Street. The stock fell about 24% this week after Humana said in an 8-K filing that only 25% of its total members are currently enrolled in Medicare Advantage plans rated 4 stars and above for next year. This is drastically below the 2024 enrollment of 94%. Star ratings offer consumers a way to compare Medicare Advantage plans, with 1 being the lowest and 5 being the highest. Stephens downgraded the stock to equal-weight from overweight, calling Humana’s plunge in enrollment as “the worst-case scenario outcome.” Humana shares are currently down 47% on the year. In addition, investors are very bearish around Dollar General, which has an RSI of 25. Shares of the discount retailer have plummeted about 38% in 2024. Last week, Citi downgraded the stock to a sell rating from neutral, citing competition from Walmart. “DG is known for its value. So is WMT, and WMT is hard to beat on value,” wrote analyst Paul Lejuez. “DG is known for convenience (easy in-and-out purchases). And since the pandemic, so has WMT, because the way consumers think about convenience is changing and WMT has stepped up its game with omni-channel delivery options.”
Las Vegas Sands is among the most overbought names on Wall Street
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