Tesla and Micron Stocks Enter Overbought Territory Amid Market Rally

Tesla shares surged 18% this month following news of a proposed $1 trillion pay package for CEO Elon Musk. The broader market index rose 1.6% this week, but the rally has pushed several stocks into overbought territory, with Tesla and Micron standing out prominently.

CNBC data highlights S&P 500 stocks with gains exceeding 5% and Relative Strength Index (RSI) readings above 70—a threshold signaling excessive buying. Micron's RSI hit 81.2, while Tesla's reached 75.6, leaving both vulnerable to sudden pullbacks if profit-taking ensues.

Micron's stock soared 20% this week, its strongest five-day performance since March 2020. The rally followed a bullish price target upgrade from Citi, which raised its estimate to $175, citing robust demand for memory chips in data centers. Analyst Christopher Danely noted Micron's upcoming earnings report could exceed consensus expectations due to rising DRAM and NAND pricing.

The gains reflect a broader $14 trillion equity market surge since April, though Micron's extreme RSI suggests caution. Tesla's momentum, driven by Musk's compensation news, faces similar overextension risks as traders monitor technical indicators for signs of reversal.