1. Diginex Ltd reports an RSI of 72, suggesting overbought conditions. 2. Aeva Technologies shows an RSI of 80.6, also indicating potential overbought status. 3. Diginex stock rose 58% in a month; Aeva gained 82% in five days. 4. Momentum investors may face risks in these rapidly increasing stock prices. 5. Both stocks highlight trends relevant to S&P 500 technology sector performance.
Overbought indicators may signal price corrections; however, strong earnings reports temper risks. Historical instances of high RSI leading to corrections, such as tech stocks in 2000, support this view.
The significant gains and overbought signals in key tech stocks could influence market psychology, impacting broader S&P 500 sentiment. Momentum trading strategies may react to these signals, affecting technology sector-heavy indexes.
The RSI levels suggest potential immediate price corrections within weeks. Short-term volatility is common among overbought stocks, particularly in the technology sector.