Top 5 Materials Stocks That Are Ticking Portfolio Bombs

The most overbought stocks in the basic materials sector presents an opportunity to go short on these overvalued companies.

The RSI is a momentum indicator, which compares a stock's strength on days when prices go up to its strength on days when prices go down. When compared to a stock's price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70.

Here’s the latest list of major overbought players in this sector.

Avient Corporation AVNT

• Avient reported better-than-expected Q4 adjusted EPS and sales results. "Orders in Europe and Asia were slightly better than expected at the end of the year. In addition, demand for composites including Dyneema applications for personal protection were also higher," said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. "Combined with better margins, our adjusted EPS for the quarter exceeded our projections by $0.09." The company’s stock has a 52-week high of $54.77 .
• RSI Value: 72.41
• AVNT Price Action: Shares of Avient gained 9.7% to close at $42.42 on Wednesday.

Livent Corporation LTHM

• Livent reported mixed quarterly results. "Livent had another strong performance in the fourth quarter and finished the full year 2022 with record financial results," said Paul Graves, president and chief executive officer of Livent. The company’s stock has a 52-week high of $36.38.
• RSI Value: 73.95
• LTHM Price Action: Shares of Livent gained 9.1% to close at $27.39 on Wednesday and added 0.6% in after-hours trading.

Martin Marietta Materials, Inc. MLM

• Martin Marietta reported better-than-expected Q4 revenue. Ward Nye, Chairman and CEO of Martin Marietta, said, “2022 marked our Company’s eleventh consecutive year delivering increased products and services revenues, gross profit and Adjusted EBITDA, as well as our most profitable year ever.” The company has a 52-week high of $406.85.
• RSI Value: 77.58
• MLM Price Action: Shares of Martin Marietta Materials gained 7.5% to close at $382.80 on Wednesday and lost 0.7% in after-hours trading.

Vulcan Materials Company VMC

• Vulcan raised its quarterly dividend from $0.40/share to $0.43/share. The company’s 52-week high is $197.76.
• RSI Value: 77.54
• VMC Price Action: Shares of Vulcan Materials jumped 5.3% to close at $195.45 on Wednesday and lost 0.1% in after-hours trading.

Ternium S.A. TX

• Ternium posted downbeat quarterly results. The company has a 52-week high of $50.36.
• RSI Value: 74.02
• TX Price Action: Shares of Ternium gained 5% to settle at $41.00 on Wednesday and lost 2.7% in after-hours trading.

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