Some stocks may see a pause or pullback after Wall Street bounced back this week following a global sell-off in early August. All three major averages are expected to finish the week higher, with more positive economic data this week fueling a recovery rally. The Nasdaq Composite should post the largest percentage gains of any index, heading for a weekly close 5% higher. Meanwhile, the S&P 500 should end the week up over 3%, while the Dow Jones Industrial Average is on track to end the week 2% higher. This is the best week of the year so far for the S&P 500. CNBC Pro looked for S&P stocks with a high 14-day Relative Strength Index. An RSI above 70 can indicate overbought conditions for a stock and possibly a near-term pullback. According to technical analysis, these stocks may have come too far, too fast in the comeback rally. Here are the most overbought names in the index: Starbucks is one of those names, with an RSI of around 72.6. Shares of the Seattle-based coffee company have risen more than 25% this week after it announced that CEO Laxman Narasimhan would be replaced by Chipotle CEO Brian Niccol. The stock had its best day ever on Tuesday following the news, rising 25%. Meanwhile, Chipotle shares plunged more than 10% following Niccol’s departure. This stock is down about 5% week to date. SBUX Mountain 08/12/2024 Starbucks, Week to Date Wall Street has since reacted positively to the leadership change, gaining renewed confidence in the company’s revival. JPMorgan called Niccol a “unique” hire for the coffee chain, and TD Cowen — along with others like Piper Sandler and Baird — decided to upgrade Starbucks in the wake of the move. “In our view, Starbucks is bringing on board a CEO from the restaurant hall of fame, and his appointment as CEO and chairman of Starbucks suggests a new era has dawned,” TD Cowen analyst Andrew Charles wrote in a note to clients on Tuesday. Retailer Walmart also made the list with an RSI of about 70.7. Shares are up about 8% for the week after the company beat second-quarter earnings and revenue expectations on Thursday. Walmart also raised its full-year forecast. Wall Street is largely bullish on the name. Of the 40 analysts covering the stock, 37 of them have issued a strong buy or buy recommendation. The remaining three are neutral and have a hold rating. Kellanova has the highest RSI on the list at around 88.8. The stock is up more than 7% this week and hit a new 52-week high on Wednesday after M&M owner Mars agreed to acquire the company in an all-cash deal valued at $35.9 billion. Cybersecurity company Fortinet, whose shares hit a new 52-week high on Friday, made the top 10 with an RSI of 77.7. Nike, another retailer, also made the top 10 with an RSI of around 73.
Walmart and Starbucks are among the most overbought stocks facing a decline
