Investing Notes: RSI Indicators and Overbought Stocks

Investing Notes: RSI Indicators and Overbought Stocks

No doubt, the biggest performing stock this year has been Boeing [stock_quote symbol=”BA”], and in July the stock surpassed 50% gain YTD! I mean, that’s insane. And it looked like Boeing was carrying the entire stock market in recent months.

But alas, the RSI (Relative Strength Indicator) for BA also reached overbought levels in July, and thus, the stock is pulling back a little bit in August, and that’s where we are now with the stock.

Portfolio Grader gives BA a grade of ‘A’, which translates to a strong buy. While gives BA a ‘Bullish’ grade, which also translates to a ‘buy’ status. So, the pullback in August could mean (but don’t quote me) an opportunity to buy some shares. And if you already have positions in the stock, it might be a good idea to buy more shares for cost-averaging for the year.

RSI: Overbought or Oversold Stocks

The most basic RSI application is to use it to identify areas that are potentially overbought or oversold. Movements above 70 are interpreted as indicating overbought conditions; conversely, movements under 30 reflect oversold conditions. The level of 50 represents neutral market momentum and corresponds with the center line in other oscillators such as MACD.

Check out: RSI: Investopedia

Raytheon and RSI

Speaking of Defense Stocks, Raytheon [stock_quote symbol=”RTN”] has had a fantastic run in the past several days, most likely due to tensions between North Korea and the U.S., but at the same time, the threat of nuclear war has been weighing heavily on the stock market’s performance this past week.

Investors have been buying into Raytheon, and it shows in the RSI chart, as the stock is definitely in overbought territory, and could be due for a pullback soon. In August, we are seeing defense stocks getting some mixed performances as the tensions and threats continue.

McDonald’s and RSI

McDonald’s Corporation [stock_quote symbol=”MCD”] is doing well so far in August, seemingly appearing like ‘comfort food’ to those stressed out from the possibility of all-out-war with North Korea. The stock is below overbought territory with its RSI chart still hovering below 70 but steadily climbing.

MCD has been on a steady uptrend and seems to be a good buy for the dividends as well. Portfolio Grader gives the stock a grade of ‘A’ (strong buy), while gives the stock a ‘Bullish’ grade, which is also a buy.

Wednesday April 25, 2018 by Carlos Rull
Filed as: Money, Trading Notes
Investing and Trading
Thursday January 11, 2018 by Carlos Rull
Filed as: Money
Solana Beach
Saturday August 12, 2017 by Carlos Rull
Filed as: Stocks
Friday July 28, 2017 by Carlos Rull
Filed as: Stocks
stock performance
Thursday July 27, 2017 by Carlos Rull
Filed as: Stocks
Thursday July 27, 2017 by Carlos Rull
Filed as: Stocks



Carlos Rull

Carlos Rull is a musician living in the San Diego area. His interests include Yoga, Eastern Philosophy, Zen Buddhism, and Gardening. He plays drums, piano, and composes New Age & Ambient music, and his albums are available on iTunes and

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