Fomento Económico Mexicano, S.A.B de C.VFMX has moved higher as of late, but there could definitely be trouble on the horizon for this company. That is because FMX is now in overbought territory with an RSI value of 73.11.
What is RSI?
RSI stands for 'Relative Strength Index' and it is a popular indicator used by technically focused investors. It compares the average of gains in days that closed up to the average of losses in days that closed down; readings above 70 suggest an asset is overbought, while an RSI below 30 suggests undervalued conditions are present.
Yet FMX's high RSI value isn't the only reason for investors to be concerned, as there has been some decidedly negative earnings estimate revisions in FEMSA's stock as of late. This is especially true when investors dive into some of these revisions in order to get a better picture of FMX's prospects for the near term.
Over the past two months, investors have witnessed 1 earnings estimate revisions lower compared to just none higher for the current year. The consensus estimate for FMX has also been on a downward trend over the same time period too, as the estimate has fallen from $3.62/share two months ago to just $3.50/share today.
If this wasn't enough, FEMSA also has a Zacks Rank #5 (Strong Sell)which puts it into unfortunate company among its peers. So, given all of these factors, investors may want to consider exiting this stock now before it falls back to Earth.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.