Investors on Wall Street have been battling with the Federal Reserve’s latest guidance, which has contributed to a week of losses for the major indexes. Fed Chair Jerome Powell said on Wednesday that he plans to raise interest rates one more time before the year ends, and then cut them two times in 2024. Powell said that there is still “a long road” to travel to achieve the goal of getting inflation to 2%. Investors were alarmed by his comments, which fueled fears that borrowing rates would remain high for longer. CNBC examined FactSet data in order to determine what equity traders are betting or fleeing as macroeconomic uncertainties continue. The relative strength (RSI), which measures the speed and strength of stock price movements, is a good indicator of whether stocks are overbought. A reading of the 14-day RSI below 30 could indicate a buying opportunity. While a rating over 70 may signal a pullback. Boeing, the aerospace behemoth, has a 14-day RSI reading of 2.5. This is an extremely oversold level. FactSet polled 54% of analysts who maintain a Buy rating for Boeing stock. Their average price target implies a 26% increase in value. Boeing’s stock has risen nearly 4% in the past year. CFRA downgraded Boeing’s shares on Friday to hold, citing quality control problems that could affect the company’s schedule of deliveries. Dollar Tree, a discount retailer with a 14 day RSI of 10,7, was also included in the list. Around 41% of FactSet’s analysts rate Dollar Tree as a purchase, and their average estimates suggest a 46% increase in the stock price. Dollar Tree’s stock has fallen 26% in the past year. Since August, when the retailer reported quarterly results and provided investors with a less than optimistic profit forecast, shares have been under pressure. Overbought stocks The managed care company Molina Healthcare, with an RSI 14-day of 87.4, is the most overbought name on Wall Street. The company provides a large amount of health care through government programs such as Medicare and Medicaid. FactSet polled more than 41% analysts who rate the shares as buys, with a forecast that averages a 4.6% increase. Molina shares have been on a steady upward trend over the last three months, with a gain of 16%. The third quarter results will be announced on October 25. Investors have shown a weakened appetite for health-care stocks in 2023, as fears of recession persist and interest rates rise. Humana and McKesson, two health-care companies, were among the overbought Wall Street stocks with 14-day RSI values of 77.8 et 76.9 respectively. FactSet’s average analyst forecasts suggest that Humana could gain 18% and McKesson could gain 9%.
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