Shares RSIs, highs and lows

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

The oil sector continues to dominate the overbought list today, as Premier Oil is still the target of a bid by Ophir Energy, and Shell remains strong following results last week.

Despite the fact that retailer N Brown saw what can be described as good growth last year,  the shares are continuing to drop,and are down another 2% this morning. This implies that investors are falling out of love with the company.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

Salamander Energy  146 88.05 Chemring Group 223 20.47
BG Group 1259 84.47 N Brown Group 460.5 21.59
InterContinental Hotels Group 2181 83.37 Pace 348 22.01
AstraZeneca 4721.5 79.62 Serco Group 356 26.74
Royal Dutch Shell  2350.5 76.87 Paragon Group of Cos 363.8 27.53
Premier Oil 345 75.26 CSR 566.5 28.13
Investec 521 74.89 WS Atkins 1268 28.14

 

Keep an eye on National Grid this week as it heads towards 850p. Last year’s rally towards this level saw it become overbought, but the rise this year has been much more measured. Tesco and Morrisons continue to bounce around near 52-week lows and I see little reason for any rally in the short-term, while pessimism abounds regarding this sector. 

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

AZ Electronic Materials SA 402.1 -0.72% WM Morrison Supermarkets 198.7 2.00%
Provident Financial 2026 -0.83% Tesco  286.55 2.89%
United Utilities Group 802 -0.93% International Public Partnerships 128.1 3.72%
Heritage Oil 314.4 -1.10% Dairy Crest Group 463.7 3.95%
Royal Dutch Shell 2350.5 -1.28% Informa 484.2 4.02%
National Grid 838 -1.35% Intertek Group  2943 5.56%
Wolseley 3482 -1.55% UBM  654.5 5.74%

 

*What is a relative strength index?

Relative strength index is a technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.

An asset is viewed as overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a candidate for a possible pullback. Conversely, if the RSI approaches 30, it is an indication that the asset may be oversold and may become undervalued.

**What is the significance of 52-week highs and lows?

One popular strategy is to buy when shares exceed 52-week highs and sell when they fall below 52-week lows.

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