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Shares RSIs, highs and lows

A regular look at shares trading close to significant levels.

Compass has edged higher this morning, and despite finishing yesterday well off the highs, the shares are still in overbought territory. Meanwhile temporary power supplier Aggreko is also on the overbought list today, electrified by a strong bounce off the £15 level that carries it to levels not seen since the beginning of March. However, if the rally is maintained it will still have difficulty pushing above the January highs around £17.50.

Meanwhile, engineer Renishaw has completed its journey from overbought to oversold, as it slumps from all-time highs around £22, and while a short-term bounce is possible there is little support to be had above £16.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

SuperGroup 1058 23.20 Compass 995.5 80.05
Chemring Group 211.5 25.06 Salamander Energy 144.5 79.66
Balfour Beatty 228 25.68 InterContinental Hotels Group 2203 75.44
Petrofac 1206 25.94 Aggreko 1687 75.27
Renishaw 1704 27.21 Heritage Oil 315.3 74.33
Petropavlovsk

65.5

27.67 Premier Oil 351.1 74.29
Drax Group 631 28.18 Investec 534 73.31

 

Miner Lonmin is floundering after its half-year results earlier in the week, racing towards the 250p level that proved to be the bottom during its 2012 slump. Continuing strikes don’t help either, and sentiment towards the stock looks decidedly bearish.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

IMI 1596 -0.06% Mothercare 157 0.80%
National Grid 857.5 -0.41% Dairy Crest Group 456.7 2.38%
Bunzl 1685 -0.41% Informa 482.8 3.72%
Imperial Tobacco Group 2657 -0.52% Lonmin 259.4 3.84%
Heritage Oil

315.3

-0.82% Kenmare Resources 12.75 4.08%
Cobham 311.5 -0.89% Experian 1069 4.80%
United Utilities Group 836.5 -1.12% International Public Partnership 129.6 4.94%

 

*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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