Caterpillar (NYSE: CAT) dropped more than 6% after missing earnings estimates. Management also lowered their guidance for the next quarter. Before reporting earnings on Wednesday morning, CAT was overbought with a ConnorsRSI of 89.24 at the close on Tuesday. After the company released its earnings, CAT sold off.
This has been a recurring pattern this earnings season. Overbought stocks that disappoint investors are selling off sharply and oversold stocks that beat expectations are rising.
Today, we will be seeing reports from oversold companies that include Microsoft (NASDAQ: MSFT), Cabot Oil & Gas (NYSE: COG) and Lattice Semiconductor (NASDAQ: LSCC). Each of these stocks has a ConnorsRSI below 10 and could be buy candidates.
On the short side, overbought stocks with a ConnorsRSI of at least 90 and releasing earnings today include ITT Educational Services (NYSE: ESI), Alaska Air Group (NYSE: ALK) and Southwest Airlines (NYSE: LUV).