After a strong rally in the stock market this week following Donald Trump’s election victory and positive earnings reports, some software companies may be due for a pullback. The S & P 500 and Dow Jones Industrial Average are up around 5%, while the Nasdaq has jumped 6.4% so far in November. Companies with an RSI above 70 are considered overbought and may be at risk of a pullback, such as video game makers Take-Two Interactive Software and Electronic Arts. Take-Two’s earnings exceeded expectations, leading to a surge in its stock price, but its RSI is nearly 84.8, indicating it may be vulnerable to a downturn. Electronic Arts also has a high RSI, suggesting it may also be overbought. Other companies like Dayforce, Paycom Software, Incyte, and Gilead Sciences could also be due for a pullback. On the other hand, some consumer goods companies like General Mills, Coca-Cola, and Keurig Dr Pepper are considered oversold and may see a bounce back in their stock prices.
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