Top 5 Tech Stocks That May Plunge In Q2

As of May 13, 2024, five stocks in the information technology 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.

Rackspace Technology, Inc. (NASDAQ:RXT)

• On May 9, Rackspace Tech posted upbeat quarterly earnings. Amar Maletira, Chief Executive Officer, stated, “I’m pleased to announce that first quarter 2024 results exceeded the high-end of guidance for revenue, operating profit, and EPS. We continue to make steady progress on our turnaround, and I’m encouraged by the continued success from implementing our healthcare vertical strategy in Private Cloud and go-to-market execution in our Public Cloud business.” The company's stock gained around 23% over the past month and has a 52-week high of $3.10 .
• RSI Value: 71.19                              
• RXT Price Action: Shares of Rackspace Technology gained 0.5% to close at $1.97 on Friday.

Daktronics, Inc. (NASDAQ:DAKT)

• On Feb. 28, Daktronics posted weak quarterly sales. “Our teams’ strong execution of the manufacturing, operating, sourcing and pricing improvements that we put in place over the past two years drove efficiencies and raised the baseline profitability of the business,” stated Reece Kurtenbach, Daktronicsʹ Chairman, President and Chief Executive Officer. The company's stock gained around 27% over the past month and has a 52-week high of $12.42.
• RSI Value: 77.15
• DAKT Price Action: Shares of Daktronics rose 1.4% to close at $11.28 on Friday.

Consensus Cloud Solutions, Inc. (NASDAQ:CCSI)

• On May 9, Consensus Cloud Solutions reported better-than-expected first-quarter financial results. “I am pleased with our Q1 performance. SoHo and Corporate revenues were ahead of expectations, which combined with our cost saving measures, produced a strong EBITDA margin of 54.5%,” said Scott Turicchi, CEO of Consensus. The company's stock gained around 55% over the past five days and has a 52-week high of $37.24.
• RSI Value: 78.73
• CCSI Price Action: Shares of Consensus Cloud Solutions rose 6.2% to close at $19.11 on Friday.

AppLovin Corporation (NASDAQ:APP)

• On May 8, Applovin reported better-than-expected first-quarter financial results. "We’re proud of the continued momentum our team has achieved through the first quarter of the new year. As we approach the first anniversary of our AXON launch, we are just beginning to explore its full potential," the company said in a letter to shareholders. The company's stock jumped around 10% over the past month and has a 52-week high is $88.50.
• RSI Value: 70.17
• APP Price Action: Shares of AppLovin rose 2.1% to close at $86.43 on Friday.

FormFactor, Inc. (NASDAQ:FORM)

• On May 1, FormFactor reported better-than-expected first-quarter sales results and issued second-quarter adjusted EPS guidance above estimates. “DRAM probe card demand continues to be robust, and as expected, first quarter DRAM revenue reached the peak levels we last experienced in 2021,” said Mike Slessor, CEO of FormFactor, Inc. The company's stock jumped around 28% over the past month and has a 52-week high of $57.39.
• RSI Value: 75.72
• FORM Price Action: Shares of FormFactor fell 0.4% to close at $56.45 on Friday.

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