These consumer discretionary stocks flash overbought signals as earnings picks up

Consumer discretionary stocks are drawing investor attention as the second-quarter earnings season gathers momentum this week, with traders assessing whether recent gains have left some names vulnerable to profit-taking.

Several companies across the sector are now trading with elevated Relative Strength Index readings, reflecting strong upward price momentum ahead of earnings reports and management guidance.

Leading the list are Taylor Morrison Home Corporation (TMHC) and The Cheesecake Factory Incorporated (CAKE), each with an RSI of 74, placing them firmly in overbought territory. Best Buy Co., Inc. (BBY) follows with an RSI of 71, while Harley-Davidson, Inc. (HOG) rounds out the top four with an RSI of 70.

Other notable names include Global Business Travel Group, Inc. (GBTG), Under Armour, Inc. (UAA), Brinker International, Inc. (EAT), Life Time Group Holdings, Inc. (LTH), Hasbro, Inc. (HAS), Burlington Stores, Inc. (BURL), CarMax, Inc. (KMX) and Victoria's Secret & Co. (VSXY), all posting RSI readings between 65 and 69.

The Relative Strength Index is a momentum indicator that measures the speed and magnitude of recent price movements on a scale of 0 to 100. Traditionally, an RSI above 70 suggests a stock may be overbought, while a reading below 30 indicates it may be oversold after an extended period of selling.

While an overbought RSI does not necessarily signal an imminent pullback, investors often monitor such stocks for potential changes in momentum, particularly around earnings announcements that can reshape market expectations.

Here is the list:

1. Taylor Morrison Home Corporation (TMHC), RSI: 74

2. The Cheesecake Factory Incorporated (CAKE), RSI: 74

3. Best Buy Co., Inc. (BBY), RSI: 71

4. Harley-Davidson, Inc. (HOG), RSI: 70

5. Global Business Travel Group, Inc. (GBTG), RSI: 69

6. Under Armour, Inc. (UAA), RSI: 68

7. Brinker International, Inc. (EAT), RSI: 68

8. Life Time Group Holdings, Inc. (LTH), RSI: 68

9. Hasbro, Inc. (HAS), RSI: 66

10. Burlington Stores, Inc. (BURL), RSI: 65

11. CarMax, Inc. (KMX), RSI: 65

12. Victoria's Secret & Co. (VSXY), RSI: 65

Consumer Discretionary ETFs: (XLY), (VCR), (FXD), (FDIS), (RSPD), and (RXI)