Are These Stocks Overbought?
More than 93 percent of the S&P 500 are trading above their moving 50-day moving average. Some of those companies, however, have significantly broken out from their trading range.
Price momentum is a relatively short-term occurrence, and as it starts to wane, the stocks that have deviated too far and fast from the average tend to revert back quickly.
The S&P 500, which has maintained a measured upside momentum since the beginning of the year, is barely up 5 percent from its 50-day moving average.
Case in point: Netflix. NFLX gained more than 42 percent on Thursday after it reported blockbuster fourth-quarter earnings. The most recent close of $146.86 is more than 61 percent away from its 50-day moving average of 91.03, making it the most widely deviated stock.
Similarly, Stryker, which traded within a 10 percent range throughout last year, is up another 16 percent year-to-date, trading more than 13 percent away from its 50-day moving average.
Here are some additional names that have seen new upside momentum in recent months.
|Ticker||Company||Price||50 DMA||% Above|
|STJ||St. Jude Medical||39.92||35.99||11%|