Dear readers, it is time once again to take a focused look at which Straits Times Index (STI) component stocks are currently oversold or overbought as at 19 December 2025. This review is designed to go straight to the point: identifying where momentum extremes are appearing within the STI and discussing what they may — and may not — imply for investors.
At this point in the year, markets are balancing year-end portfolio rebalancing, profit-taking, and positioning for 2026. Against this backdrop, momentum indicators provide a useful lens to understand which stocks have run ahead of themselves and which have lagged sharply behind.
As a reminder:
- Oversold stocks are those with RSI readings below 30.
- Overbought stocks are those with RSI readings above 70.
These thresholds highlight momentum extremes, not valuation or business quality. An oversold stock is not automatically a bargain, and an overbought stock is not automatically expensive or due for an imminent decline. Investors should always perform their own due diligence before making investment decisions.
Overbought STI Stocks (RSI Above 70)
As at 19 December 2025, three STI component stocks are classified as overbought based on RSI readings: City Developments Limited, OCBC, and SATS. These stocks have experienced strong upward momentum in recent weeks.
City Developments Limited (CDL)
City Developments Limited has entered overbought territory following a sustained rebound in its share price. The move reflects renewed investor interest in the property sector, which has been sensitive to changes in interest rate expectations, capital flows, and regional economic sentiment throughout 2025.
For property developers like CDL, momentum-driven rallies often emerge when markets anticipate stabilising financing costs or improving asset values. However, such rallies can also attract short-term traders, increasing the likelihood of volatility once overbought levels are reached.
From an investment perspective:
- Overbought conditions suggest strong recent demand for the stock
- Short-term pullbacks or consolidation are common after sharp advances
- Longer-term performance still depends on asset quality, gearing, and execution
CDL’s overbought status should therefore be interpreted as a signal of strong recent momentum rather than a definitive call to sell.
Oversea-Chinese Banking Corporation (OCBC)
OCBC stock is also trading in overbought territory as at 19 December 2025. This reflects the continued strength of Singapore’s banking sector, which has been one of the most resilient and consistently performing segments of the STI in 2025.
OCBC’s upward momentum has been supported by factors such as:
- Stable net interest margins
- Disciplined cost management
- Solid capital adequacy
- Continued regional diversification
When large-cap bank stocks like OCBC become overbought, it often signals sustained institutional accumulation rather than speculative excess. That said, overbought conditions can still lead to short-term pauses, particularly near year-end when portfolio managers lock in gains.
For long-term investors, OCBC’s overbought reading should be weighed against its earnings visibility, dividend outlook, and relative performance versus peers.
SATS Ltd
SATS has also moved into overbought territory, reflecting renewed optimism around the aviation and travel-related services sector. As global travel activity continues to normalise, stocks exposed to air cargo, ground handling, and catering services have experienced strong momentum phases.
SATS’ share price strength suggests that investors are increasingly confident in its operational recovery and longer-term strategic positioning. However, cyclical stocks like SATS are also prone to sharper swings once momentum peaks.
Key points for investors to consider include:
- Whether recent gains are supported by sustainable earnings growth
- Sensitivity to macroeconomic slowdowns or fuel and labour costs
- The risk of near-term profit-taking after strong rallies
An overbought RSI reading highlights strong sentiment but does not invalidate the long-term recovery narrative.
Oversold STI Stocks (RSI Below 30)
On the oversold side of the spectrum, only one STI constituent stands out as at 19 December 2025: Keppel DC REIT.
Keppel DC REIT
Keppel DC REIT has entered oversold territory following persistent selling pressure. Within the STI, REITs have faced a challenging environment in 2025 due to higher-for-longer interest rate concerns, refinancing risks, and competition from fixed-income alternatives.
For Keppel DC REIT specifically, the oversold reading suggests that negative sentiment has intensified over a relatively short period. However, oversold conditions can persist if macroeconomic or sector-specific headwinds remain unresolved.
Investors evaluating Keppel DC REIT should focus on:
- Debt maturity profiles and interest rate exposure
- Distribution sustainability
- Tenant concentration and asset quality
- Longer-term demand for data centre infrastructure
An oversold RSI alone is insufficient justification for a buy decision. Instead, it serves as a prompt for deeper analysis.
What Oversold and Overbought Really Mean for STI Investors
Momentum extremes are best viewed as alerts, not instructions. In the context of the STI, which is dominated by mature, dividend-paying companies, stocks can remain oversold or overbought for extended periods.
Oversold conditions may indicate:
- Broad-based sector weakness
- Forced selling or index rebalancing
- Structural changes affecting business outlook
Overbought conditions may reflect:
- Strong earnings momentum
- Defensive capital inflows
- Market leadership during uncertain periods
Using RSI without considering trend direction, fundamentals, and macro context increases the risk of false signals.
Year-End Positioning and STI Momentum
December is traditionally a period of repositioning for institutional investors. Window dressing, tax considerations, and forward-looking asset allocation decisions can exaggerate momentum signals.
As a result:
- Overbought stocks may remain elevated into year-end
- Oversold stocks may see delayed recoveries until the new year
- Short-term price action may diverge from fundamentals
Investors should therefore be cautious about making aggressive decisions based solely on December RSI readings.
OCBC Versus DBS and UOB: Year-to-Date Performance in 2025
Given that OCBC stock is one of the overbought STI constituents, it is useful to place its performance in context by comparing it with its two major local banking peers: DBS and UOB, on a year-to-date (YTD) basis in 2025.
Across 2025, Singapore bank stocks have generally delivered solid returns, supported by resilient earnings and strong capital positions. However, performance dispersion has emerged.
- OCBC has shown strong YTD gains, reflecting consistent execution and stable regional contributions. Its recent rally has pushed momentum into overbought territory, highlighting strong investor demand.
- DBS, while remaining a sector leader by market capitalisation, has experienced comparatively steadier price action. Its performance has been less momentum-driven, reflecting its already premium valuation and defensive positioning.
- UOB has delivered competitive YTD performance but with higher sensitivity to regional economic developments, resulting in periods of consolidation rather than sharp upward momentum.
OCBC’s overbought RSI reading suggests that, in the short term, it has outperformed DBS and UOB in terms of price momentum. However, all three banks remain fundamentally strong, and relative performance can shift quickly based on earnings guidance, interest rate expectations, and regional growth trends.
For investors, the comparison underscores an important point: momentum leadership does not always equate to long-term outperformance.
Final Thoughts: STI Oversold Overbought Takeaways
As at 19 December 2025, the STI oversold overbought landscape can be summarised as follows:
Overbought STI stocks:
- City Developments Limited
- OCBC
- SATS
Oversold STI stocks:
- Keppel DC REIT
These signals provide useful insights into short-term market dynamics but should never replace comprehensive analysis. RSI is most effective when used alongside fundamental assessment, trend evaluation, and disciplined risk management.
Always conduct your own due diligence and align investment decisions with your financial objectives and risk tolerance.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice.