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Shares RSIs, highs and lows

A regular look at shares trading close to significant levels.

This morning Bwin.Party Digital Entertainment (a contender for one of the silliest names in the FTSE 350) is on our oversold list. It has slumped below 128p and is now heading towards 110p, a level that has stemmed the selling so far this year. Meanwhile the same names remain on the list; a sign that these shares have yet to see significant buying.

A similar situation prevails among the overbought names, with Compass’s ongoing situation particularly interesting. It seems there remains a desire to push these shares higher.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

SuperGroup 977.5 19.89 Salamander Energy 145 81.29
Drax Group 598 21.42 National Grid 885.5 79.78
Bwin.Party Digital Entertainment 114.6 21.73 BG Group 1279.5 79.18
Lonmin 237.3 22.95 Aggreko

1721

78.94
Renishaw 1625 23.37 Compass Group 1006 77.96
Balfour Beatty

224

23.73 United Utilities Group 855.5 75.04
Mothercare 138.25 24.19 Unilever 2699 74.29

 

United Utilities is pushing towards all-time highs, aiming to replicate the achievement of National Grid, which continues to hold on around all-time highs. For the latter, the modest selling that has taken place has been insufficient to shake it from oversold levels, and it seems 880p is now providing a degree of support.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

United Utilities Group 855.5 -0.23% Kenmare Resources 10.75 0.00%
Associated British Foods 3075 -0.52% Lonmin 237.3 0.30%
Reckitt Benckiser 5075 -0.88% Experian 1032 1.18%
Heritage Oil 314.9 -0.94% Mothercare

138.25

1.65%
National Grid

885.5

-0.95% Ladbrokes 130.6 1.79%
BP 505 -0.98% Dairy Crest Group 457.3 2.51%
Imperial Tobacco Group 2659 -1.08% Dignity 1345 2.91%

 

*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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