The year just began, but there may be opportunities for investors to catch potential bounces on some stocks — or avoid pullbacks near-term. The major averages were listless on Friday, the first trading day of 2026, as they alternated between gains and losses. For the week, they finished down more than 1% across the board. That decline tipped certain individual stocks into oversold territory, making them prime targets for a rebound near term. A stock is considered oversold when its relative strength index falls below 30. However, some stocks ended the week in overbought territory. Stocks are considered overbought when their RSI tops 70. Here’s a look at the most oversold and overbought S & P 500 stocks as the new year kicks off. Cloud stock Datadog has the lowest RSI among S & P 500 members at 16.9. Shares have been under pressure of late, down more than 14% over the past month. Still, Wells Fargo analyst Ryan MacWilliams thinks the stock is a buy in 2026. “[We] view DDOG as the clearest and most NT beneficiary of AI,” he said in a note last month. “We acknowledge the risks and potential growth volatility related to a large AI lab, but believe DDOG has cemented leadership in observability, positioning itself for continued durable growth ahead.” Other stocks in oversold territory are Lamb Weston , Marathon Petroleum , CrowdStrike and AutoZone . On the flipside, Molina Healthcare is the most overbought S & P 500 member, with an RSI of 81.5. The stock has been on a tear recently, up more than 8% this week after famed short seller Michael Burry highlighted the insurer in a Substack post. Burry said he liked the stock’s valuation and even compared it to Warren Buffett ‘s Geico investment. However, analysts think the stock may be ahead of itself. LSEG data shows the average price target for Molina implies around 6% downside. Other overbought names include Freeport-McMoRan , following a massive rally in silver and other metals; Boeing , Chipotle Mexican Grill and Southwest Airlines .
