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The following is a list of overbought stocks, as defined by the Relative Strength, or RSI(14), indicator. All of the stocks mentioned below have RSI(14) values above 70.

On the other hand, all of these stocks appear to be undervalued, when comparing the current price with the average analyst target price (used as a proxy for fair value).

Although there are various limitations to this approach of finding undervalued companies, it provides a good starting point for your own analysis. 

The RSI(14) suggests that these companies are overbought, while analysts think there's more upside. What do you think? Full details below.



Analysts target prices and short float data sourced from Finviz.



List sorted by discount from analyst target price.

1. CIBER, Inc. (CBR): Information Technology Services Industry. Market cap of $404.53M. RSI(14) at 77.23. Price at time of writing $5.97 vs. target price at $7.75 (22.97% discount). Exhibiting strong upside momentum--currently trading 19.35% above its SMA20, 23.38% above its SMA50, and 65.72% above its SMA200. The stock has had a good month, gaining 31.94%.

2. Spectrum Pharmaceuticals, Inc. (SPPI):
Biotechnology Industry. Market cap of $400.89M. RSI(14) at 74.43. Price at time of writing $7.96 vs. target price at $9.6 (17.08% discount). The stock is a short squeeze candidate, with a short float at 9.93% (equivalent to 5.23 days of average volume). The stock has had a couple of great days, gaining 17.46% over the last week.

3. H&R Block, Inc. (HRB): Personal Services Industry. Market cap of $4.90B. RSI(14) at 71.12. Price at time of writing $15.84 vs. target price at $18.93 (16.32% discount). Relatively low correlation to the market (beta = 0.56), which may be appealing to risk averse investors. The stock is a short squeeze candidate, with a short float at 10.86% (equivalent to 5.76 days of average volume).

4. Weight Watchers International, Inc. (WTW): Personal Services Industry. Market cap of $4.50B. RSI(14) at 70.5. Price at time of writing $61.56 vs. target price at $70.75 (12.99% discount). The stock has had a couple of great days, gaining 5.4% over the last week.

5. Emeritus Corp. (ESC): Long-Term Care Facilities Industry. Market cap of $976.64M. RSI(14) at 71.95. Price at time of writing $25.15 vs. target price at $28.25 (10.97% discount). This is a risky stock that is significantly more volatile than the overall market (beta = 2.34). Exhibiting strong upside momentum--currently trading 9.29% above its SMA20, 18.1% above its SMA50, and 35.43% above its SMA200. The stock has had a good month, gaining 19.04%.

6. Atlas Pipeline Holdings LP (AHD): Gas Utilities Industry. Market cap of $1.10B. RSI(14) at 80.15. Price at time of writing $21.47 vs. target price at $24.0 (10.54% discount). The stock has had a couple of great days, gaining 21.34% over the last week.

7. Six Flags Entertainment Corp. (SIX): General Entertainment Industry. Market cap of $6.61B. RSI(14) at 71.62. Price at time of writing $66.93 vs. target price at $73.88 (9.41% discount). Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.02).

8. Amerisafe, Inc. (AMSF): Property & Casualty Insurance Industry. Market cap of $400.40M. RSI(14) at 81.48. Price at time of writing $21.9 vs. target price at $23.83 (8.1% discount). Relatively low correlation to the market (beta = 0.57), which may be appealing to risk averse investors.

9. Howard Hughes Corporation (HHC): REIT. Market cap of $2.53B. RSI(14) at 73.42. Price at time of writing $65.47 vs. target price at $70.0 (6.47% discount). Exhibiting strong upside momentum--currently trading 10.97% above its SMA20, 18.48% above its SMA50, and 27.67% above its SMA200.

10. Sturm, Ruger & Co. Inc. (RGR): Sporting Goods Industry. Market cap of $371.38M. RSI(14) at 83.82. Price at time of writing $20.26 vs. target price at $21.5 (5.77% discount). The stock is a short squeeze candidate, with a short float at 14.9% (equivalent to 20.56 days of average volume).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Momentum Ideas: 10 Overbought Stocks That Remain Undervalued Relative to Target Price