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Two Consumer Stocks Flashing Overbought Warning Signs This January

MarketDash Editorial Team
3 hours ago
Toyota Motor and Lowe's Companies are showing RSI readings above 70, suggesting these consumer discretionary stocks may be overextended after recent rallies. Here's what momentum traders need to know about these technical warning signals.

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If you're a momentum trader who watches technical indicators closely, two consumer discretionary stocks are waving red flags as we push deeper into January. Both Toyota Motor Corp (TM) and Lowe's Companies Inc (LOW) are sporting overbought readings that could spell trouble for anyone chasing these recent rallies.

The Relative Strength Index is one of those momentum tools that sounds more complicated than it actually is. It simply compares how strongly a stock performs on up days versus down days. When the RSI climbs above 70, it typically means the stock has gotten ahead of itself and might be due for a breather. Think of it as the market's way of saying "maybe pump the brakes here."

Toyota Motor Runs Hot After Sales Beat

Toyota Motor (TM) reported its year-end 2025 U.S. sales figures on January 5, posting solid numbers with 2,518,071 vehicles sold across North America. Investors clearly liked what they saw. The stock has jumped around 7% over the past five days alone, pushing shares to $228.63 on Tuesday, up 2.7% for the session. That's uncomfortably close to its 52-week high of $231.16.

The company's current RSI reading sits at 72.5, which puts it squarely in overbought territory. Market data shows Toyota with a momentum score of 76.94 and an impressive value score of 98.91, suggesting the fundamentals might still be solid even if the recent price action has gotten a bit frothy.

Lowe's Surges on Analyst Upgrade

Lowe's Companies (LOW) has had an even more dramatic run, climbing roughly 10% over the past month. The catalyst? Gordon Haskett analyst Chuck Grom upgraded the home improvement retailer from Hold to Buy on January 13, slapping a $325 price target on the stock. Shares rose 0.8% to $272.95 on Tuesday, approaching their 52-week peak of $274.98.

Here's the thing though: Lowe's RSI currently registers at 77.7, which is notably higher than Toyota's already-elevated reading. That level suggests the stock has gotten stretched pretty thin in the near term, regardless of whatever long-term bullish case the analyst upgrade might represent.

For traders who use momentum indicators as part of their strategy, these overbought readings don't necessarily mean you should panic sell or start shorting. They're just signals that these stocks have moved far and fast, and might need some time to digest their gains before pushing higher. Sometimes stocks can stay overbought longer than seems rational, but the odds of a pullback do increase when you see RSI values this elevated.

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Two Consumer Stocks Flashing Overbought Warning Signs This January

MarketDash Editorial Team
3 hours ago
Toyota Motor and Lowe's Companies are showing RSI readings above 70, suggesting these consumer discretionary stocks may be overextended after recent rallies. Here's what momentum traders need to know about these technical warning signals.

Get Lowe`s Cos. Alerts

Weekly insights + SMS alerts

If you're a momentum trader who watches technical indicators closely, two consumer discretionary stocks are waving red flags as we push deeper into January. Both Toyota Motor Corp (TM) and Lowe's Companies Inc (LOW) are sporting overbought readings that could spell trouble for anyone chasing these recent rallies.

The Relative Strength Index is one of those momentum tools that sounds more complicated than it actually is. It simply compares how strongly a stock performs on up days versus down days. When the RSI climbs above 70, it typically means the stock has gotten ahead of itself and might be due for a breather. Think of it as the market's way of saying "maybe pump the brakes here."

Toyota Motor Runs Hot After Sales Beat

Toyota Motor (TM) reported its year-end 2025 U.S. sales figures on January 5, posting solid numbers with 2,518,071 vehicles sold across North America. Investors clearly liked what they saw. The stock has jumped around 7% over the past five days alone, pushing shares to $228.63 on Tuesday, up 2.7% for the session. That's uncomfortably close to its 52-week high of $231.16.

The company's current RSI reading sits at 72.5, which puts it squarely in overbought territory. Market data shows Toyota with a momentum score of 76.94 and an impressive value score of 98.91, suggesting the fundamentals might still be solid even if the recent price action has gotten a bit frothy.

Lowe's Surges on Analyst Upgrade

Lowe's Companies (LOW) has had an even more dramatic run, climbing roughly 10% over the past month. The catalyst? Gordon Haskett analyst Chuck Grom upgraded the home improvement retailer from Hold to Buy on January 13, slapping a $325 price target on the stock. Shares rose 0.8% to $272.95 on Tuesday, approaching their 52-week peak of $274.98.

Here's the thing though: Lowe's RSI currently registers at 77.7, which is notably higher than Toyota's already-elevated reading. That level suggests the stock has gotten stretched pretty thin in the near term, regardless of whatever long-term bullish case the analyst upgrade might represent.

For traders who use momentum indicators as part of their strategy, these overbought readings don't necessarily mean you should panic sell or start shorting. They're just signals that these stocks have moved far and fast, and might need some time to digest their gains before pushing higher. Sometimes stocks can stay overbought longer than seems rational, but the odds of a pullback do increase when you see RSI values this elevated.