Stock of the Day: Is This the Top for Skyworks?

Skyworks Solutions, Inc. (NASDAQ: SWKS) is moving higher Friday. But that may not be the case for long. The shares are extremely overbought. They are also close to a resistance level. These can be bearish dynamics. This is why Skyworks is the Stock of the Day.

Many trading models and strategies are based on the concept of reversion to the mean. If shares get pushed above their typical or normal ranges, it will draw sellers into the market. They will be anticipating a reversion or a move lower. Their selling can put downward pressure on the shares.

One of the tools traders use to determine if a stock is overbought is the Relative Strength Index (RSI). It is on the bottom part of the chart. If the blue line is above the red horizontal line, like it is now, it indicates overbought conditions. Skyworks is also just above a r...