Investors have been accumulating shares of several big-name companies — from GE Vernova to United Airlines — during the market’s recent dip. But those and other overbought stocks could be due for a pullback, according to one popular yardstick. November is off to a strong start after the major U.S. stock indexes ended October in the red. The S & P 500 fell 1% in the previous month, snapping a five-month advance, while the 30-stock Dow shed 1.3% and the Nasdaq edged down 0.5%. Strong earnings from tech giants Amazon and Intel late Thursday were partly responsible for equity gains on Friday, as investors still look to megacap tech stocks for leadership. But even as the market as a whole tries to pick itself up, some individual companies that roared throughout October could be due for some profit-taking. CNBC Pro screened for stocks that are considered technically overbought on the basis of their 14-day relative strength index (RSI). Companies with a 14-day RSI above 70 are often regarded as overbought, signaling a pullback may be ahead, while a 14-day RSI below 30 often suggests a stock is oversold and could see future upside. GE Vernova shares have jumped 19% over the past month, and now have a 14-day RSI of 76.9. Shares briefly rose as much as 3.3% on Friday, reaching a fresh all-time high. Following this latest run, however, analysts’ consensus price target on GE Vernova suggests less than 2% potential upside, according to analysts polled by FactSet. Analysts remain bullish on the energy equipment maker, particularly after it beat third-quarter profit expectations and raised its full-year revenue guidance on Oct. 23, with the majority of analysts covering GE Vernova rating it either a strong buy or buy. GE Vernova was spun off from the old General Electric in April . Deutsche Bank analyst Nicole DeBlase, who initiated coverage of the company on Oct. 21 and lifted her target price to $374 from $354 post-earnings, cited a strong likely return on GE Vernova’s investments in power-generating assets. “We believe the forthcoming power investment cycle will enable GEV to deliver best-in-class revenue and earnings growth vs. the rest of our coverage universe,” DeBlase said in a note to clients. GEV YTD mountain GE Vernova performance this year. United Airlines is another overbought stock, with a 14-day RSI of 78.7. Shares have been on a steady tear, nearly doubling and scoring a 95% advance year to date, nearly five times the return on the S & P 500. The Chicago-based carrier also hit a new 52-week high on Friday, reaching the highest since early 2020. Strong sentiment over the past month has been fueled by United’s strong quarterly financial report in mid-October . The airline posted third-quarter earnings of $3.33 per share, excluding one-time items, while analysts polled by FactSet had estimated $3.17 per share. Analysts have a consensus buy rating and price target of about $91 on the stock, which still suggests roughly 16% potential upside. At the other end of the specutrum, Regeneron Pharmaceuticals is one of the market’s most oversold names, with an RSI of just 10.6. The maker of treatments for eye disease and cancer has seen its share price 20% over the past month. A third-quarter earnings and revenue beat on Thursday failed to impress investors, who remain concerned about Regeneron’s weaker-than-expected quarterly sales of its high-dose version of Eylea, an eye treatment. The drug faces competition from rivals and sales missed analysts’ forecast for a second straight quarter. Analysts polled by FactSet have a consensus price target that implies 32.2% upside. Cosmetics maker Estee Lauder is another beaten-down name that could get a lift, based at least on its low RSI. The stock has plummeted 31% over the past month, and more than 54% in 2024. More than 15 analysts covering the company have revised down their quarterly earnings estimates since Oct. 25, according to FactSet. Estee Lauder on Thursday before the market opened exceeded analysts’ reduced earnings estimates, but even then fell short on revenue, attributing weaker fiscal first-quarter sales to worsening consumer sentiment in China. Other oversold stocks include coffee and soft drinks maker Keurig Dr Pepper and online e-commerce platform eBay .
