Shares RSIs, highs and lows

A regular look at shares trading close to significant levels.

Sthree, the recruitment firm, is back on the oversold list this morning, as it pushes its way back towards the lows of last week. Watch for 360p as an immediate line of support, but the second dip through the 200-day moving average is a worrying sign.

InterContinental Hotels remains overbought, and is also one of the best performers from the FTSE 350 over the past two months, lifted first by good results and then bid speculation regarding a possible takeover approach by an unspecified firm.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

Carpetright 525 22.87 InterContinental Hotels Group 2338

81.49

AZEM-UK 387.5 24.30 Smith & Nephew 1048 78.42
Petropavlovsk 59.25 24.73 Vedanta Resources 1101 75.76
Sthree 363.25 32.53 Heritage Oil

318.4

74.93
Punch Taverns 11 33.07 Reed Elsevier 956.5 74.37
Renishaw

1691

34.31 Ultra Electronics Holdings 1845 72.32
Kenmare Resources 10.5 34.37 United Utilities Group 864.5 72.02

 

Antofagasta, the Chilean copper miner, is flirting with the 800p level but seems to be having difficulty pushing higher. This could result in yet another retest of 760p, the May low.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

Heritage Oil 318.4 -0.06% Experian 1037 1.87%
United Utilities Group 864.5 -0.17% Intertek Group 2902 4.09%
Rexam 534.5 -0.28% GlaxoSmithKline 1614 5.63%
Reed Elsevier 956.5 -0.31% Carpetright

525

6.49%
Pennon Group

784

-0.51% Kenmare Resources 10.5 6.49%
Imperial Tobacco Group 2698 -0.55% Marks & Spencer Group 446.7 7.72%
National Grid 890.5 -0.56% Dairy Crest Group 458 8.35%
IMI 1601 -0.56% Morrison WM Supermarkets 199.9 8.41%
Reckitt Benckiser Group 5095 -0.68% Meggitt 483.2 8.58%
Bunzl 1675 -1.00% Antofagasta 796 8.59%

 

*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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