Investors focusing on momentum indicators within the health care sector may find cautionary signs as of February 2, 2026. A trio of stocks—Brookdale Senior Living Inc, Mirum Pharmaceuticals Inc, and Amicus Therapeutics Inc—are trading with markedly high Relative Strength Index (RSI) values. The RSI, a commonly used momentum metric, contrasts the magnitude of recent gains against losses to assess if a stock is overbought or oversold. When a stock's RSI surpasses 70, it is conventionally viewed as being overbought, suggesting that it may be vulnerable to a price correction in the near term.
The RSI offers traders a gauge for potential price performance shifts by comparing upward price movement strength to downward pressure over a recent window. Such insight is valuable for short-term trading decisions, as it can precede changes in momentum before those are fully reflected in price action.
Brookdale Senior Living Inc (NYSE: BKD), a significant player in the senior housing market, reported preliminary full-year 2025 revenues at $3.2 billion on January 28. CEO Nick Stengle expressed optimism about the company's operational performance and growth potential, citing favorable industry supply and demand dynamics alongside a strategic focus on excellence in operations. These factors contributed to Brookdale’s shares increasing approximately 39% over the past month leading to a closing price of $15.00, just below its 52-week high of $15.06. Brookdale’s RSI currently stands at 89.1, a level that indicates robust recent buying but also hints at a stock that may be overextended.
Mirum Pharmaceuticals Inc (NASDAQ: MIRM) also demonstrates strong momentum. On January 30, Morgan Stanley analyst Michael Ulz reiterated an Overweight rating for Mirum while increasing the price target from $95 to $123. The analyst’s positive outlook corresponds with Mirum’s share price rising roughly 31% over the prior month. The stock achieved a 52-week peak of $103.81 and closed at $103.22 recently. Mirum’s RSI is recorded at 80.8, a figure reflective of the stock’s strength but which also suggests it is currently trading in overbought territory, a consideration that warrants close attention from investors evaluating near-term price movement risks.
Amicus Therapeutics Inc (NASDAQ: FOLD) differs slightly in circumstance, having agreed to an acquisition by BioMarin, announced December 19. Over the prior six months, Amicus’s stock price appreciated approximately 139%, achieving a 52-week high of $14.38 and finishing at $14.29 most recently. Its RSI at 80.4 similarly places it above the typical overbought threshold, consistent with its strong extended rally. Given the upcoming acquisition, the stock's momentum profile is nuanced, but the high RSI remains a useful measure for traders monitoring momentum shifts ahead of the transaction’s completion.
Investment metrics from proprietary Edge Stock Ratings further highlight the momentum characteristics of these names. Brookdale’s momentum score registers at 97.10, underscoring its strong recent price advances. Mirum and Amicus, while lacking a specific score mention here, are implied to hold elevated momentum based on their RSI levels and price trajectories.
For investors in the health care sector, these momentum indicators serve as warning signals for the possibility of short-term pullbacks or pauses in upward price action despite recent growth trends and favorable news flow. Momentum-based strategies must weigh the potential reward of continuation against the inherent risk of overbought conditions.
Key points:
- The RSI momentum indicator highlights these three health care stocks as overbought, with values above 80 signaling potential short-term vulnerability.
- Brookdale Senior Living reported $3.2 billion preliminary revenue for FY25, achieving a 39% share price gain in the past month.
- Mirum Pharmaceuticals received an Overweight rating with an increased price target from Morgan Stanley, seeing a 31% price increase recently.
- Amicus Therapeutics, announced to be acquired by BioMarin, recorded a 139% price increase over six months, accompanied by a high RSI.
Risks and uncertainties:
- The elevated RSI values across these stocks suggest elevated risk of price corrections or momentum reversals in the near term.
- Despite favorable operational and market conditions communicated by company leadership, external market factors could impact performance and investor sentiment.
- The pending acquisition of Amicus Therapeutics introduces acquisition-related risks and potential volatility until transaction completion.
- Momentum indicators such as RSI, while informative, do not guarantee outcomes and should be combined with comprehensive analysis benefiting from fundamental and operational insights.