The most overbought stocks in the materials sector presents an opportunity to go short on these overvalued companies.

The RSI is a momentum indicator, which compares a stock's strength on days when prices go up to its strength on days when prices go down. When compared to a stock's price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70.

Here’s the latest list of major overbought players in this sector.

Alto Ingredients, Inc. (NASDAQ:ALTO)

Friedman Industries, Incorporated (NYSE:FRD)

Reliance Steel & Aluminum Co. (NYSE:RS)

• Reliance Steel & Aluminum recently acquired all outstanding equity interests of Southern Steel Supply, LLC. The company has a 52-week high of $286.80.
• RSI Value: 75.81
• RS Price Action: Shares of Reliance Steel & Aluminum gained 0.4% to close at $283.32 on Wednesday.

Arconic Corporation (NYSE:ARNC)

• Arconic recently entered into a definitive agreement to be acquired by funds managed by affiliates of Apollo Global Management. The company’s 52-week high is $30.68.
• RSI Value: 70.57
• ARNC Price Action: Shares of Arconic gained 0.1% to close at $29.59 on Wednesday.

POSCO Holdings Inc. (NYSE:PKX)

• POSCO shares jumped 33% over the past six months. The company has a 52-week high of $82.42.
• RSI Value: 70.69
• PKX Price Action: Shares of POSCO rose 6.4% to settle at $81.98 on Wednesday.

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