“It is getting very overbought,” he told CNBC’s “Trading Nation” on Thursday. “Even the best companies, their stocks get ahead of themselves on a short-term basis.” Alphabet is by far the best performer among the high-growth FAANG stocks in 2021, nearly doubling the gains of the second-best performer, Facebook.
“The weekly RSI is now pushing 85. That’s the most overbought it has ever been. And not only that, if you look at its 200-week moving average, it’s at almost a 98% premium to its 200-week moving average. The next closest is 76%, so it is very, very extended here on a short-term basis,” said Maley.
“I’m not saying that people should sell the stock and, heaven forbid, you definitely shouldn’t short it. But those who like the stock I think will be able to avoid chasing it up here and they’ll be able to buy it a little bit cheaper in the weeks ahead,” said Maley.
