Tech and Retail Stocks Among Top 10 Most Overbought in the S&P 500 Amid Market Rally

Wall Street's rally has pushed 41 S&P 500 stocks into technically overbought territory, including PLTR and EBAY. The market's strong momentum has led to record highs, with the RSI gauge indicating oversold levels for these stocks.

Wall Street's recent rally has pushed 41 S&P 500 stocks into technically overbought territory, according to data from Investing.com [1]. This development suggests that these stocks have experienced significant price appreciation, potentially leading to a correction in the near future. Among the overbought stocks are Palantir Technologies (PLTR) and eBay (EBAY).

The Relative Strength Index (RSI), a widely used technical indicator, measures the speed and change of price movements. An RSI value above 70 is generally considered overbought, indicating that a stock may be due for a pullback. The S&P 500's RSI has been trending upwards, reaching levels that indicate overbought conditions for several stocks.

Palantir Technologies (PLTR) has been a standout performer in the recent rally. The stock has surged more than 18% in just five trading days, jumping close to 2.5x since early January and now trading above $185 per share [3]. Despite the impressive performance, the stock's valuation is quite high, trading at roughly 290x forward earnings and 105x FY’25 revenue. This valuation level is significantly higher than that of its peers, such as Figma and Snowflake, which are expected to post similar growth rates but trade at much lower multiples.

eBay (EBAY) is another stock that has entered overbought territory. The company's stock price has appreciated significantly, driven by strong revenue growth and improved profitability. However, the stock's valuation is also high, with a forward P/E ratio of 41.3x, which is above the industry average.

The market's strong momentum and record highs have led to a bullish sentiment among investors. However, the high valuations and overbought conditions indicate that a correction could be imminent. Investors should be cautious and consider the risks associated with these high-flying stocks, such as the potential for a drawdown in the event of a market correction.

In conclusion, the recent rally has pushed several S&P 500 stocks into overbought territory, including PLTR and EBAY. While these stocks have experienced significant price appreciation, their high valuations and overbought conditions suggest that a correction could be on the horizon. Investors should be mindful of these risks and consider their investment objectives and risk tolerance before making any trading decisions.

References:
[1] https://www.investing.com/indices/us-spx-500-technical
[2] https://seekingalpha.com/news/4484761-from-tech-to-retail-pltr-and-ebay-are-among-the-top-10-most-overbought-stocks
[3] https://www.forbes.com/sites/greatspeculations/2025/08/11/palantir-stock-at-190-time-to-cash-out/