Underestimated? 6 Technically Oversold Large-Cap Stocks

(By Alexander Crawford. Data sourced from Finviz.)

Although fundamental factors such as earnings and book value largely form the base of stock analysis, many investors argue that this is benefited by also including technical analysis.

Technical factors are those related to price and volume data; they include momentum indicators, chart patterns, and volatility measures. One particularly interesting technical indicator is the relative strength index (RSI).

RSI is a momentum indicator that measures the speed and change of stock price movements. It ranges from 0 to 100, with readings above 70 indicating overbought behaviour and readings below 40 showing oversold behaviour. Truly oversold stocks can be expected to rise to a fairer value in the near future, and vice versa for overbought stocks.

RSI(14) is one common form of the index, which is measured with data from the last 14 days.
 

Investing Ideas

To demonstrate RSI, we ran a screen on large-cap stocks for those that are technically oversold, with RSI(14) below 40.

Do you think these stocks will soon rise to a fairer value? Is the pessimism surrounding these names unwarranted?

Use this list as a starting point for your own analysis.

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List sorted by RSI(14).

1. YPF S.A. (YPF): Engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG) in Argentina. Market cap of $12.59B. RSI(14) at 30.34. The stock is currently stuck in a downtrend, trading 12.56% below its SMA20, 13.61% below its SMA50, and 24.23% below its SMA200. It’s been a rough couple of days for the stock, losing 9.12% over the last week.

2. Dish Network Corp. (DISH): Provides direct broadcast satellite (DBS) subscription television services in the United States. Market cap of $10.57B. RSI(14) at 37.53. The stock is currently stuck in a downtrend, trading 8.83% below its SMA20, 6.77% below its SMA50, and 8.52% below its SMA200. It’s been a rough couple of days for the stock, losing 8.81% over the last week.

3. Cerner Corporation (CERN): Designs, develops, markets, installs, hosts, and supports healthcare information technology, healthcare devices, and content solutions for healthcare organisations and consumers worldwide. Market cap of $10.54B. RSI(14) at 38.65. The stock is a short squeeze candidate, with a short float at 9.05% (equivalent to 7.15 days of average volume). It’s been a rough couple of days for the stock, losing 5.47% over the last week.

4. Time Warner Cable Inc. (TWC): Operates as a cable operator in the United States. Market cap of $20.07B. RSI(14) at 38.97. Might be undervalued at current levels, with a PEG ratio at 0.94, and P/FCF ratio at 8.43. It’s been a rough couple of days for the stock, losing 10.97% over the last week.

5. Lloyds Banking Group plc (LYG): Provides various banking and financial services to personal and corporate customers primarily in the United Kingdom. Market cap of $31.63B. RSI(14) at 39.7. The stock is currently stuck in a downtrend, trading 13.27% below its SMA20, 12.06% below its SMA50, and 40.73% below its SMA200. It’s been a rough couple of days for the stock, losing 15.21% over the last week.

6. Sony Corporation (SNE): Designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. Market cap of $18.62B. RSI(14) at 39.83. The stock is currently stuck in a downtrend, trading 8.2% below its SMA20, 7.7% below its SMA50, and 31.23% below its SMA200. It’s been a rough couple of days for the stock, losing 10.09% over the last week.

Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


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