Financial sector stocks are under close examination this quarter as momentum indicators suggest the potential for price corrections. Two major players in this space, Mizuho Financial Group Inc (NYSE:MFG) and Nomura Holdings Inc (NYSE:NMR), have caught attention due to their elevated Relative Strength Index (RSI) readings, indicating that both stocks may currently be overbought.
The RSI is a widely used momentum indicator in technical analysis which evaluates the magnitude of recent price changes to assess overbought or oversold conditions. Specifically, it contrasts the average gains against average losses over a set time frame to derive a numerical value between 0 and 100. Traditionally, an RSI value above 70 is considered a marker that a stock is overbought and may see selling pressure, while values below 30 suggest oversold conditions.
As of January 16, 2026, the most recent trading data reveals that both Mizuho and Nomura are displaying RSI figures significantly above this critical 70 threshold. Such readings imply strong recent upward price momentum that might not be sustainable and could lead to price reversals or increased volatility in the near term.
Nomura Holdings Inc (NYSE:NMR)
Nomura Holdings reported quarterly earnings on October 28, surpassing market expectations. This robust earnings performance likely supported investor confidence, contributing to a stock price increase of approximately 15% over the prior month.
Nomura’s stock reached a 52-week high at $9.47, closing recently at $9.39, marking a slight daily gain of 1.4% during the last session. Crucially, its RSI currently stands at 86.1, which significantly exceeds the overbought indicator level. The Benzinga Edge Stock Ratings assigns Nomura a momentum score of 90.75, further reinforcing the view that the stock is experiencing strong upward price pressure.
Mizuho Financial Group Inc (NYSE:MFG)
On January 5, Mizuho Americas, a subsidiary of Mizuho Financial Group, publicized the allocation of $1 million in grants through the Mizuho USA Foundation. These grants aim to support innovative organizations focused on equipping young adults with technology skills and clear career pathways, thereby fostering sustainable employment opportunities. Lesley Palmer, who leads Community Relations and serves as president of the Mizuho USA Foundation, emphasized the partnership with nonprofits active at the intersection of technology and education to advance these goals.
The company’s share price has similarly appreciated by roughly 15% over the past month, hitting a 52-week high of $8.59. In recent trading, Mizuho’s stock closed at $8.49, marking a daily increase of 1.2%. The current RSI value for Mizuho stands at 84.8, again well above the conventional overbought threshold. Also, the Benzinga Edge Momentum Score places Mizuho at an elevated 91.61.
Investment Implications and Market Context
The elevated RSI figures for both Nomura and Mizuho suggest that these financial stocks have been subject to considerable buying interest relative to recent price declines, reflecting pronounced upward momentum. However, given that these readings exceed the level commonly associated with overbought conditions, technical analysts may anticipate a possible short-term price pullback or increased price volatility.
Investors relying on momentum metrics as part of their trading criteria should be circumspect in the face of these signals, recognizing that the current price levels may not be sustainable over the immediate horizon. While these companies have recently posted positive developments, such as strong earnings and community-focused initiatives, the RSI indicators provide a contrasting perspective focused on pricing dynamics rather than fundamentals.
Notably, Benzinga Rankings also provide a broader quantitative assessment of these stocks, factoring in metrics such as growth and quality alongside momentum. Both companies feature prominently in their respective categories, but the lack of available value metrics for Mizuho and the strong momentum scores highlight the current technical environment rather than fundamental valuation.
Summary of Key Points
- Relative Strength Index values for Nomura Holdings and Mizuho Financial Group are 86.1 and 84.8 respectively, signaling overbought conditions.
- Both stocks have experienced approximately 15% gains over the last month, leading to new 52-week highs.
- Nomura reported better-than-expected earnings in late 2025, supporting recent price appreciation.
- Mizuho Americas committed $1 million in grants focused on education and technology skill-building among young adults, reinforcing corporate social responsibility initiatives.
Risks and Uncertainties
- RSI readings significantly above 70 typically imply that stocks might be due for a correction or increased volatility in the short term.
- Momentum-focused investors might face elevated risk if current price trends reverse unexpectedly.
- The technical indicators do not incorporate fundamental factors, and reliance solely on momentum metrics may obscure earnings or corporate developments.
- Limited value metrics for Mizuho Financial Group suggest a need for more comprehensive valuation analysis to understand pricing fully.
Investors should closely monitor these momentum indicators and balance them against fundamental performance and market conditions before making trading decisions in these financial sector equities.