When a stock gets hammered, the natural question is whether it's a falling knife or a legitimate bargain. That's where technical indicators like the Relative Strength Index come in handy, helping traders distinguish between "going down for good reasons" and "maybe oversold."
The RSI is a momentum indicator that compares a stock's strength on up days versus down days. Think of it as a measure of whether sellers have gotten a bit too enthusiastic. When the RSI drops below 30, it typically suggests an asset might be oversold and due for a breather or bounce.
Right now, three industrial sector heavyweights are flashing these oversold signals. Here's what's happening with each of them.
Aecom: Engineering Giant Takes a Hit
Aecom (ACM) has had a rough month, with shares tumbling around 14%. The infrastructure and engineering services company is now trading well above its 52-week low of $85.00, but the momentum has clearly shifted.
On December 18, Truist Securities analyst Jamie Cook maintained a Buy rating on Aecom but lowered the price target from $148 to $126. That's a notable haircut, though the analyst still sees upside from current levels.
RSI Value: 27.4
Price Action: Shares of Aecom rose 0.6% to close at $97.31 on Thursday, showing some signs of stabilization after the recent decline.
The stock carries momentum and value scores of 21.68 and 32.31 respectively, suggesting it's currently trading more on technical weakness than fundamental strength.
CACI International: Defense Contractor Under Pressure
CACI International (CACI), which provides information solutions and services to defense and intelligence agencies, has dropped approximately 9% over the past month. The stock remains well above its 52-week low of $318.60, but the recent selling pressure has been persistent.
On December 12, Citigroup analyst John Godyn initiated coverage on CACI International with a Neutral rating and set a price target of $642. That target sits above current trading levels, though the neutral stance suggests the analyst sees the risk-reward as fairly balanced.
RSI Value: 29
Price Action: Shares of CACI fell 2.1% to close at $548.96 on Thursday, extending the recent downtrend.
Generac Holdings: Power Equipment Maker Loses Steam
Generac Holdings (GNRC) has taken the biggest hit of the three, with shares plunging roughly 18% over the past month. The power generation equipment manufacturer has seen its stock cut nearly in half from higher levels, though it's still trading above its 52-week low of $99.50.
On December 8, JP Morgan analyst Mark Strouse upgraded Generac from Neutral to Overweight while maintaining a price target of $200. That represents significant upside from current levels and suggests the analyst believes the selloff has created an opportunity.
RSI Value: 29.9
Price Action: Shares of Generac fell 5.4% to close at $136.99 on Thursday, continuing the downward pressure despite the recent upgrade.
What It Means
All three stocks are trading in oversold territory based on their RSI readings, which could signal a near-term bounce if buyers step in. The analyst coverage presents a mixed picture—one Buy rating, one Neutral, and one Overweight—but all three price targets sit meaningfully above current trading levels.
Of course, oversold doesn't automatically mean "buy." Stocks can stay oversold longer than your patience lasts, especially if there are legitimate fundamental concerns driving the selling. But for traders looking for potential reversal candidates in the industrial sector, these three names are worth watching closely.