As of Dec. 5, 2024, three stocks in the consumer discretionary sector could be flashing a real warning to investors who value momentum as a key criteria in their trading decisions.

The RSI is a momentum indicator, which compares a stock’s strength on days when prices go up to its strength on days when prices go down. When compared to a stock’s price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70, according to Benzinga Pro.

Here's the latest list of major overbought players in this sector.

Five Below Inc (NASDAQ:FIVE)

• On Dec. 4, Five Below reported better-than-expected results for its third quarter and issued strong guidance for fiscal 2024. The company also announced the appointment of Winnie Park as CEO and a member of its board of directors, effective Dec. 16. The company's stock gained around 17% over the past five days and has a 52-week high of $216.18.
• RSI Value: 78.87                              
• FIVE Price Action: Shares of Five Below gained 1.7% to close at $104.97 on Wednesday.

Chegg Inc (NYSE:CHGG)

• On Nov. 25, Chegg announced a repurchase agreement for its 0% convertible senior notes due 2026. Chegg entered into private agreements with certain noteholders to repurchase approximately $116.6 million of its outstanding 0% convertible senior notes due 2026 for a cash price of $96.2 million. The repurchase transactions were entered into as part of Chegg’s previously announced securities repurchase program. The company's stock gained around 43% over the past month and has a 52-week high of $11.48.
• RSI Value: 75.33
• CHGG Price Action: Shares of Chegg gained 4.5% to close at $2.56 on Wednesday.

AutoNation Inc (NYSE:AN)

• On Oct. 25, AutoNation reported worse-than-expected third-quarter financial results. The company reported adjusted earnings per share of $4.02, missing the street view of $4.38. Quarterly sales of $6.586 billion missed the analyst consensus estimate of $6.71 billion. The company's stock gained around 13% over the past month and has a 52-week high of $197.18.
• RSI Value: 76.64
• AN Price Action: Shares of AutoNation gained 1% to close at $182.16 on Wednesday.

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