Sometimes stocks run so hot that they might need to cool off. As of January 2, 2026, two healthcare names are sitting in overbought territory, which could spell trouble for momentum traders in the first quarter.

The Relative Strength Index (RSI) is one of those technical indicators that traders watch religiously. It measures a stock's strength on up days versus down days, helping traders get a sense of whether a stock has gotten ahead of itself. When the RSI climbs above 70, it's typically a sign that an asset might be overbought and due for a breather. Here are two healthcare stocks that fit that description right now.

Teva Pharmaceutical Industries Ltd (TEVA)

Teva Pharmaceutical has had a nice run lately, and the market has responded enthusiastically to some positive corporate news. On December 24, the company announced that S&P Global Ratings upgraded its long-term issuer credit rating to 'BB+' from 'BB', with a stable outlook. That's the kind of news that gets investors excited, and it shows. The stock has climbed around 16% over the past month and recently hit a 52-week high of $31.99.

• RSI Value: 71.6
• TEVA Price Action: Shares of Teva slipped 0.4% to close at $31.21 on Wednesday.
• Edge Stock Ratings: 92.72 Momentum score with Value at 27.43.

With an RSI reading of 71.6, Teva is nudging into overbought territory. The momentum score of 92.72 confirms what the chart is telling us: this stock has been on fire. But that value score of 27.43? That's a reminder that momentum and valuation don't always move in lockstep.

Exact Sciences Corp (EXAS)

Exact Sciences has its own catalyst driving the recent surge. On November 20, Abbott Laboratories (ABT) announced it would acquire the cancer screening company for $105 per common share. That deal values the company at approximately $21 billion in total equity, or about $23 billion in enterprise value. The stock has gained around 7% over the past month and hit a 52-week high of $102.00.

• RSI Value: 77.8
• EXAS Price Action: Shares of Exact Sciences fell 0.3% to close at $101.56 on Wednesday.

With an RSI of 77.8, Exact Sciences is even more overbought than Teva. The stock is trading just shy of Abbott's $105 offer price, which makes sense. But when a stock gets this stretched on momentum indicators, even positive news can't always keep it climbing. These technical readings suggest both stocks might be due for some consolidation as we move through the first quarter.