As of May 2, 2024, two stocks in the communication services sector could be flashing a real warning to investors who value momentum as a key criteria in their trading decisions.

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, according to Benzinga Pro.  

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

Snap Inc. (NYSE:SNAP)

• On April 25, Snap reported quarterly earnings of 3 cents per share, which beat the analyst consensus estimate of a loss of 5 cents per share. The company reported 422 million daily active users in the first quarter, an increase of 39 million, or 10%, year-over-year. "The value we provide our community and advertising partners has translated into improved financial performance," said Evan Spiegel, CEO of Snap. "Our large, growing, and hard-to-reach community, brand-safe environment, and full-funnel advertising solutions have made us an increasingly important partner for businesses of all sizes." The company's stock gained around 49% over the past five days and has a 52-week high of $17.90.
• RSI Value: 79.09                              
• SNAP Price Action: Shares of Snap gained 5.4% to close at $15.86 on Wednesday.

Pinterest, Inc. (NYSE:PINS)

• On April 30, Pinterest said first-quarter revenue increased nearly 23% year-over-year to $740 million, which beat the consensus estimate of $699.872 million. "Q1 was a milestone quarter for Pinterest as we reached new highs: surpassing half a billion monthly active users and reporting 23% revenue growth — our fastest user and revenue growth since 2021," said Bill Ready, CEO of Pinterest. The company's stock gained around 31% over the past five days and has a 52-week high of $41.60.
• RSI Value: 76.62
• PINS Price Action: Shares of Pinterest gained 21% to close at $40.48 on Wednesday.

Now Read This: Apple, Kellanova And 3 Stocks To Watch Heading Into Thursday