Shares snapshot – RSI and highs & lows

Chris Beauchamp takes quick look at shares trading at significant levels.

In technical analysis, the relative strength index (RSI) helps to provide suggestions as to which stocks have seen extreme moves in the recent past, and which are now in oversold or overbought territory. 

Readings above 70 warn of an overbought condition, suggesting a share may be poised to encounter a downward correction. In contrast, readings below 30 point to an oversold condition that may be poised to see rebound.

The stocks currently trading at overbought and oversold levels are shown below:

Relative Strength Index (RSI)

Company

Share Price

Oversold

Company

Share Price

Overbought

Drax Group 655.5 25.29 Salamander Energy 117.5 74.05
Shanks Group 101.5 26.30 Caledonia Investments/fund 2099 72.86
N Brown Group 511.5 29.68 JD Sports Fashion 1770 72.09
Colt Group SA 128.5 30.12 UK Commercial Property Trust LTD 82.7 71.30
Betfair Group 970 30.15 Talvivaara Mining Co 8.4 70.47
Chemring Group 242 30.57 Investec 508 69.92
Amlin 441.7 31.04 Imperial Tobacco Group 2542 69.52

 

We can also see which shares are close to recent 52-week highs and lows. One popular strategy is to buy when the shares exceed 52-week highs and sell when they fall below 52-week lows.

Highs/Lows

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

AMEC 1233 -0.08% WM Morrison 197.8 1.07%
Inmarsat 772.5 -0.19% International Public Partnerships 126.1 2.11%
AZ Electronic Materials SA 402 -0.77% Telecity Group 639.5 2.24%
Imperial Tobacco Group 2542 -0.82% Aveva Group 1991 4.35%
Bunzl 1655 -0.90% Serco Group 410.1 4.51%
Royal Dutch Shell 2259 -0.99% Intertek Group 2934 5.24%
AstraZeneca 4244.5 -1.15% William Hill 331.9 5.44%

 

It is important to note that nothing is a certainty in financial markets, and an asset may remain overbought or oversold, or above or below the 52-week high/low, for an extended period without witnessing any ‘correcting’ move.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.