Alphabet is now sitting in overbought territory, and the sign is coming from both GOOG and GOOGL’s 14‑day RSI reading of 72.2, a level that tells short‑term traders the stock may be due for weakness.
This happened during a week when the major U.S. stock averages still managed to finish higher, even as November as a whole dragged.
The Nasdaq Composite fell 1.5% for the month, snapping a seven‑month winning streak, while the S&P 500 and the 30‑stock Dow barely held onto small gains as pressure built across big technology names over high valuations and real questions around when massive AI spending will finally turn into steady profits.
Using the CNBC Pro stock screener, analysts filtered for companies inside the S&P 500 that rallied this week while also posting an RSI above 70, and that screen pulled up only a handful of names.
Alphabet and Ralph Lauren landed near the front of that group. The metric flags stocks that have run too hard in a short time and may be set for near‑term pullbacks even when broader markets look calm.
Alphabet draws buyers as Gemini 3 fuels the latest rally
The move in Alphabet came as investors rushed into the stock after growing doubts around OpenAI’s funding model and renewed questions about the strength of ChatGPT after the ChatGPT‑5 release in August failed to impress.
Traders focused instead on Gemini 3 and the company’s in‑house Tensor Processing Units, both of which pushed shares sharply higher this week. The stock’s rise over the past year has also been visible on its one‑year performance chart as money continued to rotate into select AI names.
Melius Research analyst Ben Reitzes addressed the run in a client note on Nov. 24. Ben wrote, “Some investors are petrified that Alphabet will win the AI war due to huge improvements in its Gemini AI model and ongoing benefits from its custom TPU chip.”
He added, “Gemini 3 should help the highly profitable API business and arguably vaults GOOGL ahead in agents … the benefits of Gemini 3 are being deployed immediately to help Search within AI Mode, which also helps alleviate concerns in the core business.”
The quotes landed as the stock pushed deeper into technically stretched levels.
Merck and retail names join the overbought list
Merck also landed on the overbought screen with a 14‑day RSI of 80, the highest reading among the group. The drugmaker reported third‑quarter earnings and revenue above expectations in late October, driven by strong demand for its cancer immunotherapy Keytruda.
Around the same time, Merck narrowed its full‑year profit outlook after lowering estimated tariff costs and adjusting for other items.
On Nov. 14, the company announced plans to acquire Cidara Therapeutics in a nearly $9.2 billion deal to secure access to an experimental flu drug.
After the rally, Merck shares climbed more than 21% in November, and analysts now see limited upside. Their consensus price target of $102.43 implies about 2% downside, based on market tracking from LSEG.
Ralph Lauren and Las Vegas Sands rounded out the rest of the overbought group. Ralph Lauren’s RSI sits at 71, while Las Vegas Sands stands at 79.8. Ralph Lauren shares jumped 8% this week, lifting the stock to a November gain of roughly 15.5%.
The rally followed a strong second‑quarter performance and guidance, which pushed analysts at TD Cowen and Telsey Advisory Group to raise their price targets earlier this month.
All of the stocks on the list share the same warning light right now. They posted fast gains in a market already uneasy about stretched prices, slowing momentum in tech, and the long road ahead for turning AI investment into steady cash flows, according to the same market screen that flagged each of them this week.
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Source: https://www.cryptopolitan.com/alphabet-ranks-among-top-overbought-stocks/
