Shares RSIs, highs and lows

A regular look at shares trading close to significant levels.

Pub company and restaurateur Mitchells is the latest firm to appear on our oversold list. The share price has declined some 15% since the 2014 top in March, even as the company announces a return to dividends and a rise in profits.

Vedanta Resources is still rising, and seems to have taken up near-permanent residence on the overbought list. Smith & Nephew has joined it, having risen 4% following more indications from Stryker that the US firm will be entering talks with S&N.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

Petropavlovsk 59.25 21.51 InterContinental Hotels Group 2298

79.40

Carpetright 520 24.11 National Grid 889 75.62
Dairy Crest Group 435.1 32.58 Pennon Group 784 74.77
Punch Taverns 11 33.67 Heritage Oil

317.1

74.45
Kenmare Resources 10.5 34.37 Smith & Nephew 1024 73.01
Renishaw

1682

34.43 Aggreko 1706 73.00
Mitchells & Butlers 410.8 35.08 Vedanta Resources 1116 72.72

 

Hikma Pharmaceuticals has stormed back to its highs for the year, no doubt partially lifted by all the attention that has been focused on the sector following the Pfizer/AstraZeneca story.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

Hikma Pharmaceuticals 1702 0.00% Experian 1037 1.87%
Reed Elsevier 948.5 -0.05% Dairy Crest Group 435.1 2.93%
United Utilities Group 863.5 -0.06% Intertek Group 2892 3.73%
Heritage Oil 317.1 -0.28% International Public Partnerships

129.5

4.86%
Pennon Group

784

-0.32% Carpetright 520 5.48%
Rexam 532.5 -0.47% GlaxoSmithKline 1617.5 5.86%
National Grid 889.5 -0.67% Kenmare Resources 10.5 6.49%
Reckitt Benckiser Group 5080 -0.78% Dignity 1392 6.50%
BP 506.8 -0.84% Marks & Spencer Group 445.6 7.45%
Bunzl 1677 -0.89% Meggitt 482.8 8.49%

 

*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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