S&P 500 Works Off Overbought Levels

The S&P 500 is riding a 4-day losing streak, and following today's 1% pullback, the index has moved back below overbought territory for the first time in a few weeks.  As shown below, last week at this time, nine out of ten sectors were overbought, but as of the close today, just three were overbought -- Consumer Discretionary, Health Care and Telecom.  The only sectors that haven't pulled back over the past week are the defensive ones -- Health Care, Telecom and Utilities.  The Utilities sector has actually moved up out of oversold territory while the cyclical sectors have really gotten hit.  The Industrials sector is now the closest to its 50-day of the nine that are still above their 50-days.

Breadth has obviously taken a hit with this pullback as well, but it still remains strong.  As shown below, 70% of stocks in the S&P 500 are currently above their 50-days.  

Below is a snapshot of where the 30 largest S&P 500 stocks currently stand within their normal trading ranges.  A majority are still trading in overbought territory, but just a handful have seen upside momentum over the past week.  Google (GOOG), Johnson & Johnson (JNJ), AT&T (T), Pfizer (PFE), Merck (MRK), Verizon (VZ) and Comcast (CMCSA) are the seven stocks on the list that have actually moved higher within their trading ranges since last Tuesday.  Microsoft (MSFT), Berkshire (BRK/B), Wells Fargo (WFC), Oracle (ORCL), Schlumberger (SLB) and yes, Apple (AAPL) have recently experienced the most downside momentum of the stocks on the list.  At the moment there are just three oversold stocks out of the largest 30 (KO, INTC, PEP), but this number could quickly balloon higher if we get another day or two like today.

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