Which are the Мost Оverbought Stocks in the S&P 500 as 2026 Аpproaches

Investors have been flocking to stocks like Merck & Co. and S&P Global, among others, as 2026 approaches. However, these companies could face a short-term correction.

The three major U.S. stock indices posted gains last week, which was shorter due to the Christmas holidays. The S&P 500 led with a 1.4% increase, followed by the Nasdaq Composite with a 1.2% rise, along with the Dow Jones Industrial Average.

Still, some individual stocks may already be “overbought” and poised for a pullback. Below, a stock screening tool is used to identify the most overbought and oversold companies on Wall Street, measured by the 14-day Relative Strength Index (RSI).

Stocks with a 14-day RSI above 70 are considered overbought, indicating a potential upcoming correction. Conversely, a reading below 30 shows a stock is oversold and may be due for a rebound.

The table below shows stocks with an RSI above 70 that have also gained at least 3% for the week through Friday morning.

With an RSI of 73, one of the standout names on the list was Merck. The pharmaceutical giant’s shares rose about 5% over the week.

Last week, BMO Capital Markets upgraded the company’s rating to “outperform.”

“Following a shift in sentiment toward Merck, supported by stabilizing forecasts for Gardasil, recent agreements with the U.S. government, and positive clinical trial results such as CADENCE, we believe investors see additional short-term upside for MRK,” wrote analyst Evan Siegerman. “While not all questions around replacing Keytruda revenue are resolved, we see a realistic path to clarifying most of the picture, leaving room for growth even with a modest decline in earnings per share during the period of exclusivity loss.”

S&P Global, with a 3% gain for the week and an RSI of 72, was another overbought stock. Morgan Stanley named the company as one of its top investment ideas in its 2026 forecast released last week.

“SPGI has already significantly reduced risks following Investor Day in November, when the company presented growth and margin targets that were within preliminary expectations,” wrote analyst Tony Kaplan.

On the other hand, some stocks have entered oversold territory, signaling a potential rebound. The table below shows stocks with an RSI below 30 that have also declined at least 1% since the start of the week through Friday morning.

With an RSI of 28, Lennar shares fell about 3% over the past week. Last week, several leading Wall Street investment banks downgraded the homebuilder to “underperform,” including Bank of America, Evercore ISI, and RBC Capital Markets.

Bank of America analyst Rafe Jadrosich noted that the downgrade followed weaker-than-expected fourth-quarter results and first-quarter guidance.

“We are lowering our earnings-per-share forecasts for fiscal 2026 and 2027 by 24% and 14%, respectively, to reflect weaker margin and revenue prospects,” he wrote. “LEN shares have dropped 5% versus a 1% decline for the S&P 500, and we see further downside risk as the stock continues to trade at a premium despite lower returns on tangible capital and stronger pressure on margins and returns compared with peers.”

Lamb Weston, DataDog, and Marathon Petroleum also make up the list of oversold stocks.