As the market continues to grind higher without a correction, MoneyShow's Tom Aspray scans a lagging sector for candidates to buy on the inevitable pullback.
Overseas markets were mixed Monday as while Japan's Nikkei 225 was up over 2%, European stocks markets were down for the third day in a row. The focus was on currencies and commodities as the industrial metals were hit especially hard.
As I reviewed in last Friday's Week Ahead column, the daily A/D lines are positive but do show a loss of upside momentum. Though this increases the odds of a correction, it would take some time for a top to be completed.
The weekly starc band scan of the Nasdaq 100 stocks shows that there have been some bright spots as quite a few stocks are now at overbought levels. Leading the list is Netflix Inc. (NFLX) as it is up over 100% so far this year and closed last week at $189.51, which was 5% above its weekly starc+ band at $180.24.
The first four stocks on the list all closed last week above their weekly starc+ bands, which makes them all high-risk buys at current levels. But which of these ten most overbought stocks should you be looking to buy on a correction?
Chart Analysis: Activision Bizzard Inc. (ATVI) is a $15.9 billion dollar multimedia and graphics software company. The stock has accelerated to the upside recently after it beat the street's earning estimates for the fourth quarter in a row. In addition they have $4 per share in cash.
Virgin Media Inc. (VMED) is a $12.1 billion company that provides cable TV services in the United Kingdom. It made its low in late 2011 at $20.51 and has been in a steady uptrend since the spring of 2012.
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