Oversold All-Stars: Contrarian Plays in a Frothy Market

In a market increasingly driven by speculative euphoria, three stocks—Copart (CPRT), Cooper Companies (COO), and UnitedHealth (UNH)—present compelling contrarian opportunities. Each exhibits extreme RSI readings signaling oversold conditions, coupled with improving fundamentals and analyst support that suggest a reversal is near. For investors willing to embrace short-term pain for long-term gains, these names offer a rare mix of technical validation and value-driven potential.

Copart (CPRT): A Deep Value Trap with Catalysts Ahead

Copart's 14-day RSI has plunged to 21, its lowest level in years, after a 21% drop from its all-time highs following underwhelming May earnings. Despite reporting record revenue, the stock has been punished for slowing growth and investor skepticism about its long-term margin resilience.

Why Buy Now?
- Analyst Backing: JPMorgan's $55 price target (vs. current $50.13) implies a 10% upside, while the 12-month average forecast of $55.50 suggests further appreciation.
- Catalysts Ahead: The company's dominance in the salvage auction market and potential cost-cutting initiatives could stabilize margins.
- Technical Setup: A bounce from the $50 support level, combined with a RSI rebound above 30, would confirm a short-term reversal.

Risk: E-commerce competition and macroeconomic sensitivity remain headwinds.

Cooper Companies (COO): Oversold Momentum Meets Strong Fundamentals

Cooper Companies' RSI briefly dipped into the low 20s—its weakest level in over a year—before a 6% surge on positive Q2 earnings. The stock's recovery reflects reduced short interest and reaffirmed guidance of 10-15% EPS growth for 2025.

Why Buy Now?
- Technical Turnaround: The RSI's rapid rebound suggests a shift from panic selling to buying pressure. A sustained close above $75 could target the $100.38 12-month average price forecast (38.77% upside).
- Market Leadership: Cooper's dominance in the contact lens market and rising global demand for its products provide a tailwind.
- Contrarian Edge: Short interest has fallen by 20% in recent weeks, signaling a potential capitulation phase.

Risk: Regulatory scrutiny in international markets could weigh on growth.

UnitedHealth (UNH): Neutral RSI Masks a Hidden Contrarian Play

While UNH's RSI of 54.57 places it in neutral territory, its valuation and institutional activity make it a stealth contrarian pick. The stock has been pressured by legal challenges and a 200-day moving average (MA) at $358.11—far above its current $303.22 price—creating a “value gap.”

Why Buy Now?
- Fundamental Strength: A P/E of 12.69 and EPS of $23.89 highlight its affordability. The stock's $6.2 million call LEAPS options position at $290 signals bullish institutional bets.
- Technical Nuance: While the RSI isn't oversold, the 5-day and 50-day MAs are bullish, and the MACD's recent flattening hints at momentum stabilization.
- Catalysts: A July earnings report and resolution of DOJ investigations could unlock value.

Risk: Regulatory overhang and a weak healthcare sector backdrop pose headwinds.

Conclusion: The Contrarian's Edge in Oversold Names

The trio of CPRT, COO, and UNH exemplify the contrarian ethos: buying when fear is priced in, and fundamentals are undervalued. While technical indicators like RSI provide entry signals, the true edge lies in their undiscounted growth drivers and analyst consensus.

Actionable Advice:
1. CPRT: Accumulate on dips below $50, with a stop-loss below $48.
2. COO: Buy the pullbacks below $75, targeting $85 first.
3. UNH: Consider a core position at current levels, with a focus on earnings catalysts.

In a market obsessed with growth at any cost, these stocks offer a disciplined contrarian strategy—buying quality at a discount when sentiment is darkest.

Disclaimer: Past performance does not guarantee future results. Investors should conduct their own research and consult professionals before making decisions.