Marketdash
Back to Stock Market News

Two Financial Stocks Flashing Overbought Warning Signs

MarketDash Editorial Team
2 hours ago
UBS Group and Assurant are showing RSI readings above 70, suggesting these momentum favorites in the financial sector may be due for a pullback after strong recent runs.

When stocks get too hot, they sometimes need to cool down. That's the warning two financial sector names are flashing right now for investors who pay attention to momentum indicators.

The Relative Strength Index, or RSI, is a momentum gauge that compares how a stock performs on up days versus down days. Think of it as a fever thermometer for stocks. When the RSI climbs above 70, traders generally consider an asset overbought, meaning it might be due for a breather after a strong run. It doesn't guarantee a drop, but it suggests the rally may have gotten ahead of itself.

Here are two major financial stocks currently flashing elevated RSI readings that momentum traders might want to watch carefully.

UBS Group AG

UBS Group AG (UBS) has been on a tear lately. The Swiss banking giant caught a boost on December 16 when Bank of America Securities analyst Antonio Reale upgraded the stock from Neutral to Buy, simultaneously jacking up his price target from $44 to $60.3. That vote of confidence helped propel the shares roughly 21% higher over the past month, bringing them close to the 52-week high of $47.30.

RSI Value: 75.5

Price Action: UBS shares dipped 0.1% to close at $46.52 on Tuesday.

Momentum Score: 89.48

With an RSI of 75.5, UBS is sitting well into overbought territory. That doesn't mean the party has to end immediately, but it does suggest the stock might struggle to maintain its upward trajectory without taking a pause.

Assurant Inc

Assurant Inc (AIZ) delivered the kind of earnings report that makes investors happy. On November 4, the specialty insurance provider beat expectations with its third-quarter results, prompting President and CEO Keith Demmings to highlight the company's strength.

"Supported by our strong third quarter results, our year-to-date outperformance illustrates the strength of Assurant with earnings growth contributions from Global Housing and across Connected Living and Global Automotive within Global Lifestyle," Demmings said. "Our financial performance further reinforces the importance of the disciplined execution of our strategy to drive momentum through continuous innovation, exceptional customer experiences and commercial success."

The stock has climbed about 7% over the past month, pushing toward its 52-week high of $243.76.

RSI Value: 74.5

Price Action: Shares of Assurant gained 0.3% to close at $242.13 on Tuesday.

At 74.5, Assurant's RSI is also signaling overbought conditions. The company's fundamentals look solid based on recent earnings, but technical indicators suggest the stock might need to digest its recent gains before pushing higher.

For momentum traders, these elevated RSI readings serve as yellow flags rather than red lights. They indicate that both stocks have experienced strong buying pressure recently and may be vulnerable to profit-taking or consolidation in the near term.

Back to Stock Market News

Two Financial Stocks Flashing Overbought Warning Signs

MarketDash Editorial Team
2 hours ago
UBS Group and Assurant are showing RSI readings above 70, suggesting these momentum favorites in the financial sector may be due for a pullback after strong recent runs.

When stocks get too hot, they sometimes need to cool down. That's the warning two financial sector names are flashing right now for investors who pay attention to momentum indicators.

The Relative Strength Index, or RSI, is a momentum gauge that compares how a stock performs on up days versus down days. Think of it as a fever thermometer for stocks. When the RSI climbs above 70, traders generally consider an asset overbought, meaning it might be due for a breather after a strong run. It doesn't guarantee a drop, but it suggests the rally may have gotten ahead of itself.

Here are two major financial stocks currently flashing elevated RSI readings that momentum traders might want to watch carefully.

UBS Group AG

UBS Group AG (UBS) has been on a tear lately. The Swiss banking giant caught a boost on December 16 when Bank of America Securities analyst Antonio Reale upgraded the stock from Neutral to Buy, simultaneously jacking up his price target from $44 to $60.3. That vote of confidence helped propel the shares roughly 21% higher over the past month, bringing them close to the 52-week high of $47.30.

RSI Value: 75.5

Price Action: UBS shares dipped 0.1% to close at $46.52 on Tuesday.

Momentum Score: 89.48

With an RSI of 75.5, UBS is sitting well into overbought territory. That doesn't mean the party has to end immediately, but it does suggest the stock might struggle to maintain its upward trajectory without taking a pause.

Assurant Inc

Assurant Inc (AIZ) delivered the kind of earnings report that makes investors happy. On November 4, the specialty insurance provider beat expectations with its third-quarter results, prompting President and CEO Keith Demmings to highlight the company's strength.

"Supported by our strong third quarter results, our year-to-date outperformance illustrates the strength of Assurant with earnings growth contributions from Global Housing and across Connected Living and Global Automotive within Global Lifestyle," Demmings said. "Our financial performance further reinforces the importance of the disciplined execution of our strategy to drive momentum through continuous innovation, exceptional customer experiences and commercial success."

The stock has climbed about 7% over the past month, pushing toward its 52-week high of $243.76.

RSI Value: 74.5

Price Action: Shares of Assurant gained 0.3% to close at $242.13 on Tuesday.

At 74.5, Assurant's RSI is also signaling overbought conditions. The company's fundamentals look solid based on recent earnings, but technical indicators suggest the stock might need to digest its recent gains before pushing higher.

For momentum traders, these elevated RSI readings serve as yellow flags rather than red lights. They indicate that both stocks have experienced strong buying pressure recently and may be vulnerable to profit-taking or consolidation in the near term.