While the fear of missing out (FOMO) is a powerful emotion, sometimes the patient approach to stock prices to watch presents a better situation. I learned the hard way.
In January of this year, I hastily bought call options in Biomea Fusion (NASDAQ:BMEA) based largely on short-squeeze speculation. I didn’t even bother to understand what the company does. The next day, BMEA stock tumbled badly. Fortunately, I was able to get out of the trade with a profit – but only with the skin of my teeth.
I won’t repeat the experience. FOMO got the best of me. And it will get the best of you if you’re not careful.
Still, I understand the pangs of regret of not biting on a hot stock. We’ve all been there. However, there are few things worst in the market than converting FOMO into pain. Let’s try to avoid that with a little prudence. Below are key stock prices to watch.
Intuitive Machines (LUNR)
One of the high-flying speculative enterprises, Intuitive Machines (NASDAQ:LUNR) specializes in lunar program specialties. These include lunar surface access, orbit delivery, and communications at great distances. Days ago, the company was planning to launch its Nova-C commercial lunar lander with the help of launch partner SpaceX. Further, the mission had historical implications.
Another element that motivated LUNR stock to swing northward is the renewed interest in space exploration. Beyond just bragging rights, lunar missions should help accelerate scientific research. As well, the mission serves as a stepping to stone to exploring other parts of our galaxy.
However, it’s also fair to call LUNR stock overpriced. According to StockCharts, the security’s relative strength indicator (RSI) stands at 85.75 points, indicating a wildly overbought status. Looking at LUNR’s point-and-figure (P&F) chart, the stock prints a double top breakout pattern, suggesting further bullishness.
Nevertheless, downside risk to $4.75 to $5 also exists based on supply demand dynamics in the charts. Also, LUNR exceeded analysts’ average price target of $5 (and the high side of $6). Therefore, it’s one of the stock prices to watch – but not to buy just yet.
Ralph Lauren (RL)
One of the most popular fashion companies, Ralph Lauren (NYSE:RL) represents a top-tier discretionary retail brand. However, is it top tier enough to warrant RL stock printing a nearly 24% return since the beginning of January? Let’s add to the question: is Ralph Lauren worth a market premium of almost 53% up over the past 52 weeks? Because that’s exactly what’s happening.
Personally, it’s difficult to see RL stock continuing to march higher given its overheated status. Looking at the charts, the equity’s RSI indicator clocks in at 83.31 points. That’s extremely overbought and when we saw a similar scenario play out in December, Ralph Lauren pulled back. Of course, it quickly shot higher but this move seems awfully incredible.
Looking at RL’s P&F chart, I recognize the ascending triple top breakout pattern posted on Feb. 15. However, supply demand dynamics suggest that if RL encounters headwinds, we’re looking at a possible correction to $138 to around $146.
Notably, while analysts peg shares as a moderate buy, the $190.25 average price target implies only 5% upside. I think it’s one of the stock prices to watch.
SoundHound AI (SOUN)
Folks are bullish on SoundHound AI (NASDAQ:SOUN) and for good reason. As InvestorPlace contributor Larry Ramer pointed out, SOUN stock jumped higher after Nvidia (NASDAQ:NVDA) disclosed that it held about $3.7 million of SoundHound’s shares. With Nvidia benefiting handsomely from artificial intelligence, it’s not surprise that it likes SoundHound, which converts human speech directly into language that AI-powered computers can understand.
Quite possibly, the innovation could represent the key to making AI far-less frustrating. Believe it or not – and I believe because I’ve seen it – AI-driven chatbots are unreliable, even in the field of math which should be their forte. It’s math, after all. Still, I’m not entirely sure that SOUN won’t incur a near-term correction.
Yes, the Nvidia news is awesome but we’ve already seen how other AI-related enterprises have stumbled. Plus, SOUN prints an RSI of 84.94 points, indicating an extreme magnitude of overbought pressure. If the rally doesn’t hold, it’s quite possible to see shares correct to around $2.25.
Analysts don’t agree, though, pegging SOUN a unanimous strong buy with a $4.67 target. At the very least, you’ll need to be careful.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
