Top 2 Tech & Telecom Stocks That May Keep You Up At Night This Month

Two communication services stocks, Trade Desk (TTD) and So-Young International (SY), are exhibiting high Relative Strength Index (RSI) values, indicating they are overbought and potentially signaling a warning for momentum-focused investors. Trade Desk, slated to join the S&P 500 on July 18, has seen its stock jump approximately 7% over the past month, closing with an RSI of 75.1. Concurrently, So-Young International, which recently regained Nasdaq compliance, surged an extraordinary 346% last month, registering an RSI of 81.

Analysis

Two communication services stocks, The Trade Desk (TTD) and So-Young International (SY), are exhibiting overbought technical signals that warrant caution from momentum-focused investors. The Trade Desk, with a Relative Strength Index (RSI) of 75.1, is technically overextended following a 7% gain over the past month, a move catalyzed by its announced inclusion in the S&P 500, effective July 18. Despite the positive news flow and high Edge Stock Ratings for Momentum (91.92) and Value (93.51), its current price of $75.43 remains substantially below its 52-week high of $141.53. The situation is more extreme for So-Young International, which registered an RSI of 81 after an extraordinary 346% price surge in the past month, driven by its regaining of Nasdaq compliance. Closing at $4.24, SY is now approaching its 52-week high of $4.84, amplifying the risk of a near-term reversal. Both equities present a conflict between strong fundamental catalysts and technical indicators suggesting recent price action may be unsustainable.

Key Decisions for Investors

• For Trade Desk, investors should anticipate potential 'sell the news' volatility around its July 18 S&P 500 inclusion, as the overbought RSI of 75.1 could trigger short-term profit-taking despite the positive long-term catalyst.
• Given So-Young International's extreme 346% monthly gain and an RSI of 81, holders should consider trimming positions to realize profits, as the stock is highly vulnerable to a sharp correction from these overextended levels.
• Momentum-based strategies suggest avoiding new long positions in either TTD or SY at current prices; a more prudent approach would be to wait for a potential price consolidation or pullback before considering entry.