The 10 most overbought and oversold ASX 200 stocks – Week 13
- Virgin Money is potentially the next ASX departure after receiving a $5.7 billion offer from Britain's largest building society
- CSR tops the ASX 200's overbought stocks list with an RSI of 84. Also set to be taken out by France's Saint-Gobain
- Oversold stocks are dominated by the companies that reported disappointing half-year FY24 results. These stocks experienced significant selloffs and continued to spiral lower post-earnings season
Takeover chatter is swirling in the market and Virgin Money VUK is likely the next potential departure from the ASX after receiving a $5.7 billion offer from Britain's largest building society.
The 14-day Relative Strength Index is a momentum indicator that measures the magnitude and speed of recent price changes to assess whether or not a stock is overbought or oversold.
An RSI of 70 or above is considered to be overbought, which means the stock is rising too quickly and likely to experience a pullback. Meanwhile, an RSI of 30 or below is considered to be oversold, which means the stock is falling too quickly and is likely to experience a rebound.
Based on this indicator, CSR (set to be acquired by France's Saint-Gobain at $9.00 cash per share) is the most overbought stock on the ASX 200 with an RSI of 84.
Most Overbought ASX 200 Stocks
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
---|---|---|---|---|---|---|
CSR | CSR | 84 | 5.6% | $8.83 | $7.17 | -18.8% |
WEB | Webjet | 83 | 20.2% | $8.74 | $9.20 | 5.3% |
ARF | Arena Reit | 78 | 14.8% | $3.88 | $3.95 | 1.8% |
NWL | Netwealth | 78 | 12.9% | $21.23 | $17.99 | -15.3% |
VUK | Virgin Money | 77 | 36.1% | $4.11 | a | na |
360 | Life360 Inc | 76 | 73.2% | $13.70 | $15.04 | 9.8% |
LNW | Light & Wonder Inc | 75 | 23.3% | $167.05 | na | na |
ALQ | ALS | 74 | 13.3% | $13.73 | $13.19 | -3.9% |
SUN | Suncorp Group | 74 | 8.2% | $16.30 | $16.57 | 1.7% |
ALU | Altium | 74 | -0.5% | $65.14 | $62.35 | -4.3% |
'Target price' is an aggregate of broker target prices from Refinitiv. Data of Friday, 15 March 2024 close
Takeover candidates aside, Webjet WEB shares soared 9.2% to a fresh four-year high last Thursday, after its WebBeds Investor Day Presentation revealed a bullish stance on the company's TTV (total transaction volume) growth. The key numbers included:
On track to deliver approximately $4 billion in TTV this year
On track to deliver $5 billion in TTV in FY25
Reiterates $10 billion TTV target at 50% EBITDA margin by FY30
Wholesale market forecast to grow at a compound annual growth rate of 7.7% over the next five years
Absence of M&A chatter also hints at a strong organic trajectory
"Webjet presented a detailed strategy, providing more colour about the pathway to $10 billion [TTV]. The US and APAC are the main opportunities for new customer wins, while conversion of existing traffic should be a material contributor as well," Citi analyst said in a note dated 21 March.
"Nearer term, macro should continue to assist with hotel prices and nights per transaction now both increasing simultaneously." The note retained a BUY rating with a $9.90 target price (from $7.90).
Webjet shares are up another 2.1% in early trade on Monday to $8.93.
Webjet 12-month price chart (Source: Market Index)
The oversold stocks list is largely populated by reporting season losers – Companies that reported first-half FY24 results that fell short of analyst expectations, experienced significant sell-offs on results day and have since continued to spiral lower.
In the past 16 reporting seasons, the stocks that missed analyst expectations have closed down 6.3% on reporting day and down a further 8.4% four months later, according to the Coppo Report.
Most Oversold ASX 200 Stocks
Ticker | Company | RSI | 1-Month % | Close Price | Target price | Upside |
---|---|---|---|---|---|---|
TPG | TPG Telecom | 24 | -16.4% | $4.43 | $5.15 | 16.3% |
SPK | Spark New Zealand | 26 | -8.5% | $4.42 | $4.60 | 4.1% |
BKW | Brickworks | 30 | -3.6% | $27.66 | $30.51 | 10.3% |
CRN | Coronado Global | 33 | -8.7% | $1.21 | $2.00 | 65.3% |
KLS | Kelsian Group | 33 | -11.5% | $5.77 | $7.07 | 22.5% |
IPH | IPH | 36 | -10.7% | $6.19 | $9.14 | 47.7% |
SMR | Stanmore Resources | 36 | -9.3% | $3.13 | $4.18 | 33.5% |
CNU | Chorus | 36 | -6.7% | $7.10 | na | na |
AIA | Auckland International Airport | 36 | -2.2% | $7.49 | na | na |
SGM | Sims | 37 | -5.2% | $11.90 | $13.58 | 14.1% |