When it comes to momentum, few indicators draw more attention than the Relative Strength Index or RSI. Typically, an RSI reading above 70 suggests a stock is overbought, a potential warning sign that it could be due for a pullback. But in strong bull runs, overbought can stay overbought, especially when institutional demand is surging and technical breakouts are in play.
That’s exactly the setup for two stocks worth watching this week: Snowflake and Gap.
Both are running hot, have RSIs in the mid-70s, and have cleared major resistance levels after months of range-bound trading. Despite elevated RSI readings, analysts are still calling for more upside, and here’s why both stocks may have more room to run into the summer.
Snowflake: An RSI of 75, But Momentum Is Surging
[content-module:Forecast|NYSE: SNOW]Snowflake Inc (NYSE: SNOW) is currently trading around $200, up 65% from its April low and now sitting at 52-week highs. The stock has finally broken out of a multi-month range and is showing no signs of slowing down. The MACD remains firmly bullish, confirming that momentum is real and not just a short squeeze or speculative pop.
A big driver of the move was last week’s earnings report. The tech giant smashed analyst expectations for both headline numbers, adding to their track record of recent quarters. Product revenue, the company’s core metric, rose 26% year-over-year to nearly $997 million, and this was just one of many bright spots throughout the report.
CEO Sridhar Ramaswamy credited the results to strong execution and the company’s growing reputation as a leader in data and AI infrastructure. With over 11,000 customers and a platform built to simplify enterprise-grade data management, Snowflake continues to carve out a defensible niche.
Analysts responded quickly. JMP Securities reiterated its Buy rating and set a new price target of $245, suggesting another 22% upside from current levels. Even with the RSI at 75, that kind of call underscores just how powerful the fundamental and technical setup is right now.
With buyers in control and intact breakout momentum, this is a name the bulls likely won’t give up on quickly.
Gap: An RSI of 74, But Still Poised to Set Multi-Year Highs
[content-module:Forecast|NYSE: GPS]Retailer Gap Inc. (NYSE: GPS) is another name defying gravity. The stock is also up 66% since April, with RSI now at 74 and MACD in a strong bullish posture. Shares are trading near their highest levels since the summer of 2024 and are approaching key resistance that, if broken, could set up a run toward 2021’s peak.
The move higher has been powered in part by analyst support. Last week, Citigroup reiterated its Buy rating and raised its price target to $33, implying more than 15% upside from current levels. The call reflects confidence in Gap’s recent operational improvements and its ability to hold margin gains as consumer demand rebounds.
While retail has been volatile in recent months, Gap has been an outperformer. The company has shown discipline around inventory and pricing, and recent results suggest it is navigating the macro environment better than expected. In addition to that, the technical strength of the chart makes it easy to see why investors are piling in.
Why Overbought Doesn’t Always Mean Over
The RSI is a valuable tool but doesn’t have to be a stop sign. In trending markets, a high RSI can be sustained for extended periods, especially when supported by earnings beats, raised guidance, and fresh analyst targets. Snowflake and Gap are textbook examples of this dynamic in action.
Both stocks are up over 65% in less than two months. That kind of run typically invites some short-term volatility, but the bigger picture looks constructive. If they can hold current levels or consolidate slightly while sentiment stays bullish, they could be setting the stage for another leg higher into the summer.
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