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Feb 18, 2026
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AVOID
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Masimo's RSI is 85.9, and its stock rose 34.2% on Tuesday to close at $174.69 following the announcement that it will be acquired by Danaher. The article's thesis to short MASI is based on its overbought RSI. However, in an M&A situation, a stock's price becomes anchored to the deal terms, not traditional technical indicators. The RSI is high because of the one-time acquisition news pop. Shorting a stock based on an RSI signal caused by an acquisition announcement is a flawed strategy. The stock's price will now trade based on deal probability and timeline. The article's technical reasoning is not applicable here, making it a situation to avoid. The primary risk is deal-related (e.g., the acquisition failing), which would cause a collapse, but this is a fundamental M&A risk, not the technical mean-reversion risk the article implies. |
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