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Three Healthcare Stocks Trading at Oversold Levels Worth Watching

MarketDash Editorial Team
13 hours ago
When momentum indicators flash oversold signals in the healthcare sector, it could present opportunities for investors looking to buy into undervalued companies. Three stocks currently show RSI readings near or below the traditional 30 threshold.

When healthcare stocks get beaten down, it's worth asking whether the market is overreacting or sending a legitimate warning signal. Right now, three companies in the sector are showing signs of being oversold based on technical indicators, which might present opportunities for investors willing to dig into the details.

The Relative Strength Index (RSI) is a momentum indicator that measures a stock's performance on up days versus down days. Think of it as a gauge of whether a stock has been pushed too far in one direction. When the RSI drops below 30, conventional wisdom suggests an asset might be oversold and due for a bounce. Of course, sometimes stocks are cheap for good reasons, but these readings at least warrant a closer look.

Here are three healthcare companies currently trading with RSI levels that suggest they've taken a beating recently.

Insmed Inc.

Insmed Inc. (INSM) has had a rough stretch lately. On December 17, the company announced it was halting its Brensocatib CRSsNP program after the Phase 2b trial missed both primary and secondary endpoints. That's the kind of news that tends to send biotech stocks tumbling, though in this case, shares have fallen around 2% over the past month. The stock is currently trading near its 52-week low of $60.40.

RSI Value: 26.8

INSM Price Action: Shares of Insmed fell 1.1% to close at $198.46 on Wednesday.

The momentum score for INSM stands at 96.32, suggesting significant downward pressure despite the relatively modest monthly decline.

Tempus AI Inc.

Tempus AI Inc. (TEM) has seen a sharper selloff, with shares dropping approximately 13% over the past five days. The catalyst here was a December 15 analyst note from JP Morgan's Casey Woodring, who maintained a Neutral rating but lowered the price target from $85 to $80. Sometimes a small price target adjustment can trigger outsized moves in volatile growth stocks, and that appears to be what happened here. The stock has a 52-week low of $31.36, so there's been significant volatility throughout the year.

RSI Value: 26.8

TEM Price Action: Shares of Tempus AI fell 5.1% to close at $64.62 on Wednesday.

The technical charts show a clear downtrend developing over the past week, with the oversold RSI reading suggesting the selling pressure may have reached an extreme.

Legend Biotech Corp.

Legend Biotech Corp. (LEGN) has experienced the steepest decline of the three, with shares falling around 27% over the past month. Despite this drop, the company still has analyst support. On December 17, Cantor Fitzgerald analyst Eric Schmidt maintained an Overweight rating while trimming the price target slightly from $75 to $74. That suggests at least some confidence that the current price represents a disconnect from the company's fundamental value. The stock is trading just above its 52-week low of $21.39.

RSI Value: 19.1

LEGN Price Action: Shares of Legend Biotech fell 1.1% to close at $21.42 on Wednesday.

With an RSI of 19.1, Legend Biotech shows the most extreme oversold reading of the three stocks. Technical signals have flagged potential breakout opportunities, though whether that materializes depends on whether buyers step in at these levels.

The question for investors is whether these oversold conditions represent genuine opportunities or justified pessimism. In the healthcare sector, especially with biotech companies, clinical trial results and analyst sentiment can drive dramatic swings. These RSI readings suggest the recent selling has been intense, but that alone doesn't guarantee a rebound. It does, however, put these three stocks on the radar for anyone hunting for potential value in beaten-down healthcare names.

Back to News

Three Healthcare Stocks Trading at Oversold Levels Worth Watching

MarketDash Editorial Team
13 hours ago
When momentum indicators flash oversold signals in the healthcare sector, it could present opportunities for investors looking to buy into undervalued companies. Three stocks currently show RSI readings near or below the traditional 30 threshold.

When healthcare stocks get beaten down, it's worth asking whether the market is overreacting or sending a legitimate warning signal. Right now, three companies in the sector are showing signs of being oversold based on technical indicators, which might present opportunities for investors willing to dig into the details.

The Relative Strength Index (RSI) is a momentum indicator that measures a stock's performance on up days versus down days. Think of it as a gauge of whether a stock has been pushed too far in one direction. When the RSI drops below 30, conventional wisdom suggests an asset might be oversold and due for a bounce. Of course, sometimes stocks are cheap for good reasons, but these readings at least warrant a closer look.

Here are three healthcare companies currently trading with RSI levels that suggest they've taken a beating recently.

Insmed Inc.

Insmed Inc. (INSM) has had a rough stretch lately. On December 17, the company announced it was halting its Brensocatib CRSsNP program after the Phase 2b trial missed both primary and secondary endpoints. That's the kind of news that tends to send biotech stocks tumbling, though in this case, shares have fallen around 2% over the past month. The stock is currently trading near its 52-week low of $60.40.

RSI Value: 26.8

INSM Price Action: Shares of Insmed fell 1.1% to close at $198.46 on Wednesday.

The momentum score for INSM stands at 96.32, suggesting significant downward pressure despite the relatively modest monthly decline.

Tempus AI Inc.

Tempus AI Inc. (TEM) has seen a sharper selloff, with shares dropping approximately 13% over the past five days. The catalyst here was a December 15 analyst note from JP Morgan's Casey Woodring, who maintained a Neutral rating but lowered the price target from $85 to $80. Sometimes a small price target adjustment can trigger outsized moves in volatile growth stocks, and that appears to be what happened here. The stock has a 52-week low of $31.36, so there's been significant volatility throughout the year.

RSI Value: 26.8

TEM Price Action: Shares of Tempus AI fell 5.1% to close at $64.62 on Wednesday.

The technical charts show a clear downtrend developing over the past week, with the oversold RSI reading suggesting the selling pressure may have reached an extreme.

Legend Biotech Corp.

Legend Biotech Corp. (LEGN) has experienced the steepest decline of the three, with shares falling around 27% over the past month. Despite this drop, the company still has analyst support. On December 17, Cantor Fitzgerald analyst Eric Schmidt maintained an Overweight rating while trimming the price target slightly from $75 to $74. That suggests at least some confidence that the current price represents a disconnect from the company's fundamental value. The stock is trading just above its 52-week low of $21.39.

RSI Value: 19.1

LEGN Price Action: Shares of Legend Biotech fell 1.1% to close at $21.42 on Wednesday.

With an RSI of 19.1, Legend Biotech shows the most extreme oversold reading of the three stocks. Technical signals have flagged potential breakout opportunities, though whether that materializes depends on whether buyers step in at these levels.

The question for investors is whether these oversold conditions represent genuine opportunities or justified pessimism. In the healthcare sector, especially with biotech companies, clinical trial results and analyst sentiment can drive dramatic swings. These RSI readings suggest the recent selling has been intense, but that alone doesn't guarantee a rebound. It does, however, put these three stocks on the radar for anyone hunting for potential value in beaten-down healthcare names.