Two consumer discretionary stocks are sending warning signals to momentum-focused investors as of Nov. 25, 2025, with technical indicators suggesting these retailers might have rallied a bit too far, too fast.
The Relative Strength Index (RSI) measures momentum by comparing how a stock performs on up days versus down days. It's a popular tool for traders trying to gauge short-term moves. When the RSI climbs above 70, the conventional wisdom says a stock is overbought and potentially due for a breather. Here are two consumer names currently flashing that signal.
Ross Stores Inc. (ROST)
The off-price retailer delivered solid third-quarter results on Nov. 20, beating expectations and raising its fourth-quarter earnings guidance. CEO Jim Conroy sounded upbeat about the performance: "We are pleased with our third-quarter sales results, which accelerated from the prior quarter. Our merchandise assortment of compelling brand name values resonated with shoppers, and our new marketing campaign drove excitement and higher customer engagement."
Investors clearly liked what they heard. Ross Stores surged approximately 10% over the following five days, pushing shares close to their 52-week high of $177.32. On Tuesday, the stock added another 1.4% to close at $176.50.
The rally has driven the RSI to 80.5, well into overbought territory. The stock carries a momentum score of 75.44, though its value score sits at a more modest 45.55, suggesting the price has gotten ahead of fundamentals.
Citi Trends, Inc. (CTRN)
This value-focused retailer has been on an impressive run, climbing roughly 25% over the past month. The momentum started building after Citi Trends reported second-quarter sales of $190.75 million on Aug. 26, representing 8% year-over-year growth and beating analyst estimates of $188.4 million.
CEO Ken Seipel highlighted the company's consistent performance: "Our second quarter results underscore our recent success executing our key initiatives, which drove comparable store sales up 9.2%, our fourth consecutive quarter and 12 straight months of consistent comparable sales gains. I am also pleased year-to-date sales momentum has continued into the important August back to school period."
Citi Trends shares climbed 3.1% on Tuesday to close at $45.17, approaching the 52-week high of $45.63. The stock's RSI now sits at 77.3, suggesting momentum may be stretched.
An overbought reading doesn't necessarily mean a stock will drop immediately. Sometimes strong fundamentals can support elevated technical readings for extended periods. But for traders who follow momentum signals, these RSI levels indicate both retailers might be due for consolidation after their recent runs.
