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Two Communication Services Stocks Flashing Overbought Signals

MarketDash Editorial Team
18 hours ago
Warner Bros Discovery and Fox Corp are showing RSI readings above 70, a momentum indicator suggesting these stocks may be overheated after recent gains. Here's what's driving the surge in each company.

When a stock gets too hot, momentum traders start paying attention. As of December 9, 2025, two communication services stocks are flashing warning signs for investors who care about momentum—specifically, they're looking overbought based on their RSI readings.

The Relative Strength Index is a momentum indicator that compares a stock's strength on up days versus down days. It gives traders a sense of whether a stock might be due for a breather in the short term. Generally speaking, an RSI above 70 suggests an asset is overbought, meaning it may have run up too far, too fast.

Here are the two major players in the communication services sector that have momentum traders watching closely.

Warner Bros Discovery Inc (WBD)

Warner Bros Discovery (WBD) is currently sporting an RSI of 82.3, well into overbought territory. What's behind the surge? On Monday, Paramount Skydance Corp (PSKY) launched an all-cash tender offer to acquire Warner Bros Discovery for $30 per share. The deal values the company at $108.4 billion and includes its Global Networks segment.

The stock has gained roughly 18% over the past month and is approaching its 52-week high of $28.16. Shares climbed 4.4% on Monday to close at $27.23.

From a ratings perspective, Warner Bros Discovery scores a 97.39 on momentum metrics, though its value score sits at just 24.46—suggesting this is a momentum play rather than a value opportunity.

Fox Corp (FOX)

Fox Corp (FOX) is also flashing overbought signals with an RSI of 70.9, just above that key threshold. The media company has been on a tear, gaining around 24% over the past six months.

The catalyst? Strong fiscal first-quarter 2026 results released on October 30. Revenue climbed 5% year over year to $3.74 billion, up from $3.56 billion in the prior-year period and beating Wall Street's consensus estimate of $3.57 billion. The gains were driven by strength in advertising and streaming.

Adjusted net income came in at $686 million, or $1.51 per share, crushing analysts' expectations of $1.08 per share. That's up from $672 million, or $1.45 per share, a year earlier. Shares rose 0.6% on Monday to close at $61.26, nearing the stock's 52-week high of $61.66.

For momentum-focused investors, these overbought readings suggest caution may be warranted in the near term. When stocks run this hot, they often need time to cool off before the next leg higher—or they can continue defying gravity if the underlying catalysts remain strong. In both cases here, there are clear fundamental reasons for the rallies, but the momentum indicators are waving a yellow flag.

Back to News

Two Communication Services Stocks Flashing Overbought Signals

MarketDash Editorial Team
18 hours ago
Warner Bros Discovery and Fox Corp are showing RSI readings above 70, a momentum indicator suggesting these stocks may be overheated after recent gains. Here's what's driving the surge in each company.

When a stock gets too hot, momentum traders start paying attention. As of December 9, 2025, two communication services stocks are flashing warning signs for investors who care about momentum—specifically, they're looking overbought based on their RSI readings.

The Relative Strength Index is a momentum indicator that compares a stock's strength on up days versus down days. It gives traders a sense of whether a stock might be due for a breather in the short term. Generally speaking, an RSI above 70 suggests an asset is overbought, meaning it may have run up too far, too fast.

Here are the two major players in the communication services sector that have momentum traders watching closely.

Warner Bros Discovery Inc (WBD)

Warner Bros Discovery (WBD) is currently sporting an RSI of 82.3, well into overbought territory. What's behind the surge? On Monday, Paramount Skydance Corp (PSKY) launched an all-cash tender offer to acquire Warner Bros Discovery for $30 per share. The deal values the company at $108.4 billion and includes its Global Networks segment.

The stock has gained roughly 18% over the past month and is approaching its 52-week high of $28.16. Shares climbed 4.4% on Monday to close at $27.23.

From a ratings perspective, Warner Bros Discovery scores a 97.39 on momentum metrics, though its value score sits at just 24.46—suggesting this is a momentum play rather than a value opportunity.

Fox Corp (FOX)

Fox Corp (FOX) is also flashing overbought signals with an RSI of 70.9, just above that key threshold. The media company has been on a tear, gaining around 24% over the past six months.

The catalyst? Strong fiscal first-quarter 2026 results released on October 30. Revenue climbed 5% year over year to $3.74 billion, up from $3.56 billion in the prior-year period and beating Wall Street's consensus estimate of $3.57 billion. The gains were driven by strength in advertising and streaming.

Adjusted net income came in at $686 million, or $1.51 per share, crushing analysts' expectations of $1.08 per share. That's up from $672 million, or $1.45 per share, a year earlier. Shares rose 0.6% on Monday to close at $61.26, nearing the stock's 52-week high of $61.66.

For momentum-focused investors, these overbought readings suggest caution may be warranted in the near term. When stocks run this hot, they often need time to cool off before the next leg higher—or they can continue defying gravity if the underlying catalysts remain strong. In both cases here, there are clear fundamental reasons for the rallies, but the momentum indicators are waving a yellow flag.