(Bloomberg) — The rally in US stocks is showing signs of fatigue, and investors should be ready to buy into any declines, according to Citigroup Inc. strategists.
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There are 19 out of 24 industry groups that are at or near overbought readings currently, a team including Scott Chronert wrote in a note. “The message is to expect pullbacks and buy into them,” they said.
The US equity rally since late October has been heating up amid optimism that the Federal Reserve will start cutting interest rates next year while the economy avoids a serious slowdown. But the gains had gotten extreme by some measures, with the S&P 500’s relative strength index at one point showing the benchmark was the most overbought since 2020.
Signs of a pullback are starting to emerge after the S&P 500, Nasdaq 100 and Russell 2000 slumped on Wednesday, with all three indexes no longer overbought as indicated by their RSI. Some in the…
