As of July 10, 2024, two stocks in the communication services 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.

Cinemark Holdings, Inc CNK

• On July 9, Cinemark USA announced the pricing of $500 million senior notes due 2032. The company’s stock gained around 29% over the past month and has a 52-week high of $22.19.
• RSI Value: 72.61                              
• CNK Price Action: Shares of Cinemark slipped 0.8% to close at $21.67 on Tuesday.

Douyu International Holdings Ltd DOYU

• On July 3, DouYu International approved and declared a special cash dividend of $9.76 per share to holders of record as of the close of business on August 21, 2024. “We remain dedicated to protecting shareholders’ interests despite the challenging macroeconomic and operating environment that we continue to face. Primarily due to the Company’s current cash position, our Board of Directors has approved a special cash dividend of approximately US$300 million as part of our ongoing effort to return value to our shareholders,” commented the interim management committee of DouYu. The company’s stock gained around 52% over the past five days and has a 52-week high of $18.40.
• RSI Value: 86.35
• DOYU Price Action: Shares of Douyu International gained 0.9% to close at $17.61 on Tuesday.

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