The S&P 500 booked its third consecutive gain of over 15% in 2025, but it wasn’t a banner year for everyone. Some of the market’s previous objects of affection treaded water in 2025, especially following the tariff re-rating in April.
But markets constantly fluctuate, and last year’s hated stocks often become this year’s favorites. Today, we’ll look at three stocks investors left in the dust last year that recently tripped a key technical signal on their charts. Due diligence is always a must, but these stocks might be worth paying attention to in 2026 if this Relative Strength Index signal is confirmed.
How to Interpret Oversold Readings on the Relative Strength Index
The Relative Strength Index (RSI) is one of the more prominent indicators used in technical analysis of stock prices. This index, which measures the momentum of a trend, is an intuitive and easy-to-use application for stock charts of various timeframes.
The meter is a simple scale from 0 to 100, with higher numbers indicating bullish momentum (50-70) and lower numbers indicating bearish momentum (20-40). It is useful for stocks across any sector or market cap, and has also been helpful for cryptocurrencies and other volatile assets.
But the RSI also shows when a trend reaches extreme levels unlikely to be sustained. When the signal line on the oscillator reaches 70 or above, traders consider the stock ‘Overbought’, meaning that buyers are likely in short supply and a drawdown could be imminent and swift.
The opposite side of the spectrum is Oversold, triggered when the RSI dips below 30. An oversold stock is one in which sellers have driven the share price to a discounted level where buyers should theoretically be interested, thereby enhancing the chance of a strong upside momentum swing.
3 Oversold Stocks With Potential to Rebound This Year
The RSI isn’t a foolproof indicator; no such thing exists. “Where there’s smoke, there’s fire” is a good axiom in the real world, but it doesn’t necessarily apply to the investment world. However, smoke still requires investigation, and when a stock is flashing oversold on the RSI, it's a signal to dig deeper and find out why. Some stocks hit oversold territory because their shares are in a deserved freefall due to a scandal or a failed product. In others, it could be a sign that a bottom has been reached, at least in the short term.
That’s the idea with these three companies today, all of whom had a 2025 they’d prefer to forget. But now that they’ve reached the oversold threshold, there are signs that the bottom is in, and 2026 holds brighter days for these forgotten firms.
Netflix: Signs of a Bottom With 2026 Tailwinds
Netflix Inc. (NASDAQ: NFLX) said goodbye to its seminal hit Stranger Things with a New Year’s Eve finale that broke the platform in real time and set record viewership numbers.
But the real headlines that have caught investors' attention are the company’s potential merger with Warner Bros. Discovery Inc. (NASDAQ: WBD) and its foray into live sports.
Warner Bros. once again rejected a hostile bid from Paramount, sticking with Netflix as its preferred merger partner.
Despite these tailwinds, NFLX shares are basically flat over the last 12 months, including a nearly 30% drawdown in the previous quarter.
Here’s where the chart provides some hope. The stock is trading back near the $85 level, which proved to be a short-term bottom in January and April last year. The downward momentum is beginning to slow, with the RSI hitting oversold territory, and the Moving Average Convergence Divergence (MACD) indicator is trending up for the first time since August. Netflix’s next catalyst could come on Jan. 20 when the company reports Q4 2025 earnings.
Altria: Steady Dividends and Value
Altria Group Inc. (NYSE: MO) is one of the more conservative consumer goods stocks thanks to its highly regulated products with well-known health impacts.
But Altria is also a Dividend King with a 56-year history of payout raises that currently yields more than 7%. The dividend payout rate remains elevated (over 80%), but its business nature allows ample profits and cash flow to be returned to shareholders as dividends.
When income stocks like MO appear to bottom, value investors swoop in, and that seems to be happening over the last few days, with the stock up nearly 5%. The RSI has struck the Oversold level twice in the previous two months, similar to its action at the end of 2024, when a new rally ensued.
Zscaler: Former Meme Stock Now Regaining Footing
Zscaler Inc. (NASDAQ: ZS) is the cloud security stock that doubled between April and November, only to lose a third of its value in just under 60 days to end 2025. A rollercoaster ride deserving of meme stock status, the stock appears to be gearing up for a run based on earnings, rather than pure speculation. The company reported positive results in fiscal Q1 2026, including record revenue of $788 million.
The downtrend hasn’t stopped just yet; however, the momentum is waning, and the chart shows promise. The RSI has been Oversold for more than a month, but the MACD is now trending upward, showing that buyers are regaining strength. Analysts also still love the stock, with 34 analysts assigning a consensus Buy rating and an average price target of $320, representing upside of more than 45%.
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The article "3 Oversold Stocks Ready to Rebound in 2026" first appeared on MarketBeat.
