Top 2 Financial Stocks That May Plunge in Q2

As of June 16, 2025, Velocity Financial (VEL) and AlTi Global (ALTI) are flashing overbought signals based on their Relative Strength Index (RSI), with values of 79.4 and 71.3 respectively. Velocity Financial, which recently reported strong quarterly earnings driven by increased production volume, saw its stock close at $19.22 on Friday, near its 52-week high, while AlTi Global, despite mixed Q1 results, closed at $3.92, also near its high. These high RSI values suggest potential short-term corrections for both stocks.

Analysis

As of June 16, 2025, technical indicators highlight two financial sector stocks, Velocity Financial (VEL) and AlTi Global (ALTI), as potentially overbought, with Relative Strength Index (RSI) values of 79.4 and 71.3 respectively, both above the commonly accepted 70 threshold. Velocity Financial recently reported strong Q1 earnings on May 1, with President and CEO Chris Farrar attributing the 'tremendous momentum' and 'solid earnings' to record quarterly production volume and increased net interest and noninterest income. This positive fundamental backdrop fueled a c.13% rise in VEL's stock over the past five days, closing at $19.22 on Friday near its 52-week high of $20.98, though its Benzinga Edge Stock Ratings Momentum score is a more moderate 46.49. Conversely, AlTi Global, which posted mixed Q1 results on May 12, has also seen significant appreciation, gaining c.14% over the past month to close at $3.92 on Friday, approaching its 52-week high of $5.45. The elevated RSI for both stocks suggests a heightened possibility of short-term price pullbacks or consolidation, warranting caution consistent with the overall cautious market sentiment signals provided, despite their recent upward trajectories.

Key Decisions for Investors

• Given the overbought RSI levels for both Velocity Financial (79.4) and AlTi Global (71.3), investors should exercise caution regarding new long positions and monitor for potential short-term price corrections, as these technical signals suggest limited near-term upside despite recent positive stock performance.
• For Velocity Financial, while strong Q1 earnings and a 13% stock gain in five days are fundamentally positive, the very high RSI reading combined with a moderate Benzinga Edge Momentum score of 46.49 suggests that existing holders might consider reviewing profit-taking strategies, while prospective investors could await a more favorable entry point post-consolidation.
• Investors considering AlTi Global should carefully weigh its 14% monthly stock appreciation and overbought RSI against its mixed Q1 financial results, warranting a prudent assessment of its risk-reward profile before increasing exposure, particularly as its recent price movement appears less supported by fundamental improvements compared to VEL.