While the Dow Jones Industrial Average remains below its 50-day moving average, we’re seeing some internal strength that’s worth pointing out. As shown in our Trend Analyzer snapshot of the Dow 30 members below, 10 stocks are currently overbought while just 3 are oversold. This means that 10 stocks are trading more than one standard deviation above their 50-day moving averages, while 3 are more than one standard deviation below their 50-DMAs. The only 3 stocks that are oversold are United Tech (UTX), Goldman Sachs (GS), and Apple (AAPL).
In addition, more than half of the Dow 30 are trading above their 50-day moving averages, which is another sign of positive underlying breadth.
The most overbought stock in the Dow right now is UnitedHealth (UNH), followed by Pfizer (PFE), and Merck (MRK). All three of these stocks are trading in what we call “extreme” overbought territory — more than 2 standard deviations above their 50-day moving averages.
For UNH, the stock has moved from trading oversold one week ago at this time to trading extremely overbought. Talk about a sharp reversal higher!