March 19, 2010

Most Overbought Stocks On The S&P 500 Index

If you think the market is a bit overextended and are looking for some stocks to short this is probably a good list for you to analyse:

"Below we highlight the S&P 500 stocks that are trading the farthest above their 50-days. Typically the most overbought names on the list will be about 10-15% above their 50-days, but at the moment their are 33 stocks in the index with readings of more than 15%. As shown, Cliffs Natural Resources (CLF) is currently the most overbought name in the index at 28.18% above its 50-day. Smith International (SII), AIG, and Abercrombie & Fitch (ANF) aren't far behind. These three stocks are all trading more than 25% above their 50-days. Other notables on the overbought list include Ford (F), Macy's (M), and Citigroup (C) (which are all one-ticker names as well)." in Bespoke Investment Group

I would probably start looking at the consumer discretionary stocks. They had a nice run and are probably the most fragile stocks at the moment.

For instance Ford (F) has been on Jim Chanos short list for a long time. Its probably 30 to 40% higher than when he picked it as a shorting candidate.

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