Sometimes stocks get a little too popular for their own good. As of January 6, 2026, two information technology heavyweights are flashing warning signs that momentum traders should probably pay attention to.
The culprit here is the Relative Strength Index, or RSI, which measures a stock's strength on up days versus down days. Think of it as a momentum thermometer. When the reading climbs above 70, it typically means an asset is overbought and might be due for a breather. It doesn't guarantee a crash, but it suggests the easy money may have already been made.
Here are the two tech stocks that have momentum traders eyeing the exits.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor just got some good news on January 1, securing a one-year U.S. export license that allows the company to import American chipmaking equipment into its China operations. Investors loved it. The stock jumped roughly 7% over five days and is trading near its 52-week high of $331.25.
- RSI Value: 72.1
- TSM Price Action: Shares of TSMC gained 0.8% to close at $322.25 on Monday.
- Edge Stock Ratings: 88.80 Momentum score with Value at 33.75.
That RSI reading of 72.1 puts Taiwan Semiconductor firmly in overbought territory. The momentum is impressive, but it's exactly the kind of run that often precedes a pullback.
Micron Technology (MU)
Micron Technology has been on an absolute tear after demolishing earnings expectations on December 17. The memory chip maker posted first-quarter revenue of $13.64 billion, crushing analyst estimates of $12.83 billion. Adjusted earnings came in at $4.78 per share versus expectations of $3.95 per share.
"In fiscal Q1, Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units," said Sanjay Mehrotra, chairman, president and CEO of Micron.
Investors have been celebrating ever since. The stock has surged roughly 26% over the past month and is approaching its 52-week high of $325.53.
- RSI Value: 71.1
- MU Price Action: Shares of Micron fell 1% to close at $312.15 on Monday.
With an RSI of 71.1, Micron is also flashing overbought signals. The earnings were stellar, no doubt, but the stock's rapid ascent suggests much of that good news is already priced in.
For momentum traders, these elevated RSI readings don't necessarily mean it's time to panic and sell everything. But they do suggest caution might be warranted, especially for anyone thinking about jumping in now after missing the initial surge.
