Top 2 Defensive Stocks That May Crash In October

As of Oct. 7, 2024, two stocks in the consumer staples 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.

Cal-Maine Foods Inc CALM

• On Oct. 1, Cal-Maine Foods posted better-than-expected quarterly earnings. Sherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “Our financial and operating results for the first quarter mark a strong start to fiscal 2025 for Cal-Maine Foods. These results reflect favorable demand for shell eggs during most of the quarter and significantly higher market prices compared with the first quarter last year. At the same time, the national egg supply has declined due to the recent outbreaks of highly pathogenic avian influenza (“HPAI”).” The company's stock gained around 24% over the past month and has a week high of $84.67.
• RSI Value: 85.31                              
• CALM Price Action: Shares of Cal-Maine gained 6.2% to close at $84.57 on Friday.

BJ’s Wholesale Club Holdings Inc BJ

• On Sept. 23, Melius Research analyst Karen Short initiated coverage on BJ’s Wholesale Club with a Buy rating and announced a price target of $90. The company's stock gained around 11% over the past month and has a 52-week high of $92.37.
• RSI Value: 70.08
• BJ Price Action: Shares of BJ’s Wholesale rose 1% to close at $86.50 on Friday.

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