As of May 2, 2024, two stocks in the communication services sector could be flashing a real warning to investors who value momentum as a key criteria in their trading decisions.
The RSI is a momentum indicator, which compares a stock’s strength on days when prices go up to its strength on days when prices go down. When compared to a stock’s price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70, according to Benzinga Pro. Â
Here’s the latest list of major overbought players in this sector.
Snap Inc. (NYSE:SNAP)
- On April 25, Snap reported quarterly earnings of 3 cents per share, which beat the analyst consensus estimate of a loss of 5 cents per share. The company reported 422 million daily active users in the first quarter, an increase of 39 million, or 10%, year-over-year. “The value we provide our community and advertising partners has translated into improved financial performance,” said Evan Spiegel, CEO of Snap. “Our large, growing, and hard-to-reach community, brand-safe environment, and full-funnel advertising solutions have made us an increasingly important partner for businesses of all sizes.” The company’s stock gained around 49% over the past five days and has a 52-week high of $17.90.
- RSI Value: 79.09
- SNAP Price Action: Shares of Snap gained 5.4% to close at $15.86 on Wednesday.
Pinterest, Inc. (NYSE:PINS)
- On April 30, Pinterest said first-quarter revenue increased nearly 23% year-over-year to $740 million, which beat the consensus estimate of $699.872 million. “Q1 was a milestone quarter for Pinterest as we reached new highs: surpassing half a billion monthly active users and reporting 23% revenue growth — our fastest user and revenue growth since 2021,” said Bill Ready, CEO of Pinterest. The company’s stock gained around 31% over the past five days and has a 52-week high of $41.60.
- RSI Value: 76.62
- PINS Price Action: Shares of Pinterest gained 21% to close at $40.48 on Wednesday.
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