Shares RSIs, highs and lows

A regular look at shares trading close to significant levels.

African Barrick Gold is on our list today, which, given the slump in gold prices yesterday, is hardly surprising. The stock has found support around 208p during May and has lifted from its lows, but if the gold price continues to drop investor sentiment towards the company will turn negative once more.

Aveva's surge yesterday has carried it towards overbought territory and on to our list. The share price has turned lower today and suggests that a retracement may continue and carry the price back towards May lows around £20.70.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

Carpetright 522 23.15 InterContinental Hotels Group 2300

79.68

Petropavlovsk 60 25.17 National Grid 888 74.53
Punch Taverns 10 26.14 Heritage Oil 316.1 73.28
QinetiQ Group 199.9 27.57 Aggreko

1748

73.11
Drax Group 616 31.58 United Utilities 858 71.35
African Barrick Gold

219.9

32.57 Aveva Group 2252 69.90
Dairy Crest Group 435 32.58 Reed Elsevier 938 69.67

 

Reed Elsevier, United Utilities and National Grid continue to cling on to recent highs, but it looks like the fallout from Marks & Spencer's latest set of results has led to a distinct lack of enthusiasm for the company. GlaxoSmithKline has come under pressure this morning following news of the Serious Fraud Office’s decision to investigate the company over alleged bribes made to officials in foreign countries.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

Reed Elsevier 938 -0.42% Experian 1023 0.98%
United Utilities Group 858 -0.52% Dairy Crest Group 435 2.91%
Heritage Oil 316.1 -0.57% Intertek Group 2891 3.69%
National Grid 888 -0.67% International Public Partnerships

129.6

4.94%
Smith & Nephew

956.5

-0.78% GlaxoSmithKline 1607 5.17%
Pennon Group 777.5 -0.96% Carpetright 522 5.88%
BP 505.8 -1.04% Dignity 1386 6.04%
Bunzl 1674 -1.06% Rolls-Royce Holdings 1007 7.13%
Reckitt Benckiser Group 5060 -1.17% Meggitt 478.7 7.57%
Rexam 529.5 -1.30% Marks & Spencer Group 447.5 7.91%

 

*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.

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.