Hello mooers:
An overbought stock is believed to await a correction or pullback, while an oversold stock has the potential for a price bounce.
We selected a few stocks that contain potential investment opportunities with RSI indicator to find out what the most overbought and oversold companies in S&P 500 today are.
Overbought& Oversold definition
A stock would usually be considered overbought when the RSI > 70 and oversold when RSI < 30.
According to the theory created by J. Welles Wilder Jr, when the RSI < 30, it is a bullish sign (buy signal), and when RSI > 70, it is a bearish sign (sell signal).
Performance Tracking of Previous Column (10/25)
There are 5 out of 10 selected stocksthat followed the suggested movement provided by the RSI indicator.
What happen?
Shares of Tesla Inc closed lower on Friday, snapping an 11-week winning streak after filings showed CEO Elon Musk sold another block of company stock worth about US$700 million, taking advantage of a meteoric rally that vaulted the electric-car maker's value to over US$1 trillion.
The second round of hefty stock sales this week came just days after the world's richest person and Tesla's top shareholder tweeted that he would sell 10 per cent of his shares if users of the social media platform approved the move.
The electric-car maker's stock closed down 2.8 per cent at US$1,033.42 on Friday. The shares are up more than 46% this year following a sharp rally in October.
Overbought
$Pool Corp (POOL.US)$
$Seagate Technology (STX.US)$
$Arista Networks (ANET.US)$
$A.O. Smith (AOS.US)$
$Best Buy (BBY.US)$
Oversold
$Moderna (MRNA.US)$
$Allstate (ALL.US)$
$Illumina (ILMN.US)$
$PayPal (PYPL.US)$
$Dish Network (DISH.US)$
We collect stocks from S&P 500 as it contains most of valuable companies.
Want to screen the market by yourself? Read:How to use a stock screener
Want to learn more about technical trading? Read: Technical Analysis 101:Introduction to technical indicators

New trend in low margin businesses
Alibaba is currently undergoing a process that is opposite to Amazon (AMZN). Amazon started with a low-margin retail business and added the profitable AWS and advertising business which now form the core of its valuation. On the other hand, Alibaba started with a highly profitable e-commerce business and is now adding lower-margin businesses like physical retail, delivery, digital media, and others. This has led to a significant fall in overall margins for Alibaba as the new businesses cannot match the margins of the core e-commerce business.
We can see from the above image that there was a whopping 82% YoY growth in Others segment. This is the revenue from physical retail stores, which is generally a very low-margin business. It has also had an impact on the employee numbers of the company. The consolidation of Sun Art has increased the headcount of the company to over 250,000 in the last quarter compared to close to 120,000 in the previous quarter.
The revenue share of Others segment has increased from 20% in the year-ago quarter to 27% in the last quarter. If Alibaba continues to acquire other physical retail chains, we could see the revenue share from Others segment increase further.
Importance of standalone valuation
Due to the above trend, it is very important to look at the standalone valuation of different segments. We can see that Alibaba's core Customer Management business reported 14% YoY growth, which is quite good considering the revenue base of this segment. This is the business that contributes most of the profits for Alibaba.
Alibaba has also reported 29% YoY growth rate in the cloud segment. The annualized revenue from this segment is close to $10 billion, which makes it one of the main players in this industry. The revenue share of cloud business is only 8%, but Alibaba has managed to report profitability within this segment. The operating margin of Amazon's AWS is 30% while Alibaba's cloud business has a margin close to 2%. It is likely that Alibaba will be able to narrow this gap in margins in the next few quarters, which can improve the sentiment for the overall stock.
Alibaba's Digital media business had modest growth of 15% compared to the year-ago quarter. However, Alibaba was able to improve the margins from negative 19% in the year-ago quarter to negative 5% in the previous quarter. This is a 14 percentage point improvement in a single year, which has helped the company save close to $0.8 billion on an annualized basis. Even though the revenue growth is quite low in this business, Alibaba has reported a healthy 30% growth rate in average daily subscribers for Youku. According to Variety, Youku's membership base is at 90-100 million compared to 112 million for Tencent Video and 119 million for $iQIYI (IQ.US)$ . Rapid membership growth in Youku could help Alibaba replicate Amazon Prime's success and also build better loyalty for its retail platform to defend against competition from $JD.com (JD.US)$ and $PDD Holdings (PDD.US)$.

$Sea (SE.US)$ those stocks down this stock also down..

$NVIDIA (NVDA.US)$ over Fridays highs to $225. Plan accordingly. You are welcome in advance. Analysis in chart.

An actively managed ETF, $ARK Innovation ETF (ARKK.US)$ saw extraordinary returns in 2020, propelling Cathie Wood into the world’s eyes and winning her countless fanboys. Standing at USD24.42 billion, it is currently the largest of all ARK ETFs. The big question on everyone’s minds is: can ARKK replicate its success in 2021?
Cathie Wood has shown herself to have an astute eye when it comes to picking stocks and a willingness to take huge positions in companies she believe in. However, I read before that it is harder to grow a large-cap fund at the same rate as a small-cap fund as the fund manager has the enviable problem of deciding where to allocate the influx of funds and prices can be pushed up when it acquires big blocks of thinly traded shares....

For beginners, placing an order sometimes can be a difficult task.
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This is a video guide about “How to track trending stocks?".
If you have any questions, please comment and we are willing to answer your question.
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