3 Oversold Stocks Flashing Bullish Reversal Signals

Key Points

• Copart has dropped more than 20% in just a few weeks, pushing RSI to extreme lows despite record revenue.
• Cooper Companies is rebounding fast after strong earnings have started to trigger some short-covering.
• There are signs that UnitedHealth Group may have already priced in the worst-case scenario, and a reversal could be on the cards.

When it comes to short-term trading signals, few indicators are as closely tracked as the Relative Strength Index (RSI). A stock’s RSI measures the speed and magnitude of its recent price movements. A reading below 30 suggests a stock is oversold and potentially due for a bounce, while anything above 70 suggests a name may be overheated and due for a pullback.

While an overheated RSI can often be the result of a roaring rally that may be overheated but isn’t going anywhere, an extremely oversold RSI is seen as a more attractive reading if looking for a reversal trade.

With that in mind, oversold and ignored, these three stocks could rip higher.

Oversold Copart Stock May Be Poised for a Sharp Bounce

Shares of Copart Inc. NASDAQ: CPRT have fallen hard and fast in recent weeks. The stock has dropped more than 21% from its all-time highs, with the RSI collapsing to just 21. This puts the automotive giant deep in oversold territory and potentially on the edge of a sharp bounce.

The catalyst for the plunge? An underwhelming earnings report in late May. While the company posted its highest-ever revenue, the results didn’t quite justify the rally that had carried shares to new highs earlier in the spring. Some investors saw it as a sign that expectations had gotten ahead of the fundamentals.

Still, the selloff now looks overdone. JPMorgan Chase maintained a Neutral rating on the stock but set a price target of $55, well above where shares are currently trading. In fact, Copart is now trading below the level analysts were calling fair value, even after expressing caution, and the risk/reward appears quite attractive. 

Cooper’s Surprise Earnings Could Spark Bullish Turnaround

Unlike Cooper Companies Inc. NASDAQ: COO, shares of Cooper Companies have been sliding for months. Since peaking last September, the stock has been grinding steadily lower, hitting fresh multi-month lows earlier this week. The RSI even dropped into the low 20s, to its lowest level in more than a year.

But then came their earnings. Last week, Cooper delivered results that topped expectations and showed strength across its key business lines. Management also reaffirmed full-year guidance, calling for 10-15% EPS growth, which took investors by surprise as they’ve started to open up some fresh long positions. 

Yesterday alone saw the stock jump nearly 6% in strong volume, and the RSI has started to tick higher too. If this continues, the stock’s short interest, which had been building, may now become a tailwind as bearish traders are forced to cover. Don’t be surprised if this trend continues into next week. 

Analysts Stay Bullish as UnitedHealth Shows Signs of Life

UnitedHealth Group Inc. NYSE: UNH has had a painful 2025. The stock is down more than 50% from its April highs, dragged lower by disappointing earnings, negative headlines, and risk-averse investors. 

But even bearish trends run out of steam. UnitedHealth has been unable to break below recent support for nearly three weeks, which is a subtle but important change in behavior. The RSI has remained below 30 during this time, but the MACD quietly made a bullish crossover in the final days of May.

That’s not all. This past week saw several analysts reiterate their positive stance on the stock. Most notably, KeyCorp maintained an Overweight rating and issued a $400 price target, implying more than 35% upside from where UnitedHealth closed on Thursday evening. There seems to be a growing sense that much of the downside risk may already be reflected in the current share price.

If shares can hold above their recent lows and start to build a base, this may be a textbook oversold recovery play. Long-term investors may find the risk-reward increasingly attractive at these levels, especially with institutional support and valuation resets beginning to shift sentiment.