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Two Materials Stocks Flashing Overbought Warnings in Q4

MarketDash Editorial Team
11 hours ago
Freeport-McMoRan and Alcoa are showing momentum indicators that suggest they may be overbought, with RSI values above 70 despite recent analyst upgrades and strong monthly gains.

If you're the type of investor who pays attention to momentum indicators, two materials stocks might be worth a closer look as we head toward year-end. Not because they're screaming buys, but because they might be due for a breather.

The Relative Strength Index, or RSI for short, is one of those technical tools that compares how a stock performs on up days versus down days. Think of it as a temperature check for momentum. When the RSI climbs above 70, conventional wisdom says the stock is overbought and could be ripe for a pullback. Below 30? Oversold, potentially ready to bounce. It's not a crystal ball, but it gives traders a sense of whether a stock might be running too hot in the short term.

As of December 19, 2025, two companies in the materials sector are flashing those overbought signals. Here's what's going on.

Freeport-McMoRan Inc. (FCX)

The copper and gold mining giant has been on a tear lately. Shares jumped roughly 16% over the past month, pushing the stock close to its 52-week high of $49.12. That momentum has driven the RSI to 71.3, just above that overbought threshold.

Interestingly, analyst sentiment remains bullish. On December 12, UBS analyst Daniel Major maintained a Buy rating on Freeport-McMoRan and actually raised his price target from $55 to $60. So while the technical indicators suggest caution, the fundamental outlook still looks solid.

Shares rose 0.2% to close at $47.92 on Thursday. The stock also earned a momentum score of 72.67 and a value score of 60.44 in Edge Stock Ratings.

Alcoa Corp (AA)

The aluminum producer has had an even more dramatic run, with shares surging about 31% over the past month. That rally pushed Alcoa to an RSI of 72.8, the higher of the two overbought readings.

Like Freeport-McMoRan, Alcoa also received attention from UBS analyst Daniel Major on December 12. He maintained a Neutral rating but raised his price target from $42 to $48. Shares closed Thursday at $48.18, up 2.9%, and are now trading very close to the 52-week high of $48.73.

For momentum traders, these elevated RSI readings don't necessarily mean sell immediately. They're more like yellow flags suggesting these stocks have had strong runs and might need to consolidate before moving higher. Of course, in markets driven by strong fundamentals or sector tailwinds, stocks can stay overbought longer than you'd expect. But if you're considering jumping in now, it might be worth waiting for a cooler entry point.

Back to News

Two Materials Stocks Flashing Overbought Warnings in Q4

MarketDash Editorial Team
11 hours ago
Freeport-McMoRan and Alcoa are showing momentum indicators that suggest they may be overbought, with RSI values above 70 despite recent analyst upgrades and strong monthly gains.

If you're the type of investor who pays attention to momentum indicators, two materials stocks might be worth a closer look as we head toward year-end. Not because they're screaming buys, but because they might be due for a breather.

The Relative Strength Index, or RSI for short, is one of those technical tools that compares how a stock performs on up days versus down days. Think of it as a temperature check for momentum. When the RSI climbs above 70, conventional wisdom says the stock is overbought and could be ripe for a pullback. Below 30? Oversold, potentially ready to bounce. It's not a crystal ball, but it gives traders a sense of whether a stock might be running too hot in the short term.

As of December 19, 2025, two companies in the materials sector are flashing those overbought signals. Here's what's going on.

Freeport-McMoRan Inc. (FCX)

The copper and gold mining giant has been on a tear lately. Shares jumped roughly 16% over the past month, pushing the stock close to its 52-week high of $49.12. That momentum has driven the RSI to 71.3, just above that overbought threshold.

Interestingly, analyst sentiment remains bullish. On December 12, UBS analyst Daniel Major maintained a Buy rating on Freeport-McMoRan and actually raised his price target from $55 to $60. So while the technical indicators suggest caution, the fundamental outlook still looks solid.

Shares rose 0.2% to close at $47.92 on Thursday. The stock also earned a momentum score of 72.67 and a value score of 60.44 in Edge Stock Ratings.

Alcoa Corp (AA)

The aluminum producer has had an even more dramatic run, with shares surging about 31% over the past month. That rally pushed Alcoa to an RSI of 72.8, the higher of the two overbought readings.

Like Freeport-McMoRan, Alcoa also received attention from UBS analyst Daniel Major on December 12. He maintained a Neutral rating but raised his price target from $42 to $48. Shares closed Thursday at $48.18, up 2.9%, and are now trading very close to the 52-week high of $48.73.

For momentum traders, these elevated RSI readings don't necessarily mean sell immediately. They're more like yellow flags suggesting these stocks have had strong runs and might need to consolidate before moving higher. Of course, in markets driven by strong fundamentals or sector tailwinds, stocks can stay overbought longer than you'd expect. But if you're considering jumping in now, it might be worth waiting for a cooler entry point.