Been watching the market lately and spotted something interesting - a bunch of stocks that absolutely ripped this year are now flashing some serious warning signs. You know that feeling when a trade goes way too far, too fast? That's what I'm seeing right now with a few names, and the technical setup suggests it might be time to lock in gains before these things roll over.

So here's the thing about overbought stocks - they can keep running for a while, but eventually the momentum just dies. I've been using RSI to catch these moments, and it's been pretty reliable. When RSI breaks above 70, it's telling you that the buying pressure might be exhausted. Add in a bearish MACD crossover, and you've got a real setup. I always cross-check with moving averages too because false signals happen all the time.

Let me break down what I'm seeing. Reddit ran from around $50 last year to $224 - that's a wild move. Earnings were legit strong, but now RSI has flashed overbought twice this month and MACD just turned bearish. That's the kind of setup where I'm thinking about taking some chips off the table. Altria's another one - up nearly 30% year-to-date on defensive stock money, which is unusual. RSI just hit 80, first time since December, and last time that happened we saw a 10% pullback. Generac's similar story: crushed earnings, stock accelerated past $200, but now the overbought signals are firing and volume is drying up.

The pattern here is pretty clear - when overbought stocks start showing weakness in momentum indicators alongside the RSI signal, that's usually when smart money starts cashing out. I'm not saying these stocks are done, just that the risk-reward looks off at these levels. Sometimes taking profits is the smartest play.