Shares RSIs, highs and lows

Our regular look at shares trading at significant levels.

Supergroup’s 14% slump yesterday has carried it into oversold levels, after the company said that sales had been hit hard by a late Easter and a reduction in sales through the online auction site eBay. We saw the shares slump 20% in April, as this high growth and high momentum stock fell out of favour with investors. Last year was a good one for the company, so it is admittedly struggling against difficult comparisons, but the slowdown in volumes is worrying news.

Gold miner Petropavlovsk is also oversold, and rapidly heading towards a retest of the 65p low that was seen in January. A drop through here means we could see the shares fall to 55p, the all-time low in what was a very impressive downtrend.

Relative Strength Index (RSI)*

Company

Share Price

Oversold

Company

Share Price

Overbought

Salamander Energy 144.75 87.92 Balfour Beatty 225 21.17
BG Group 1274 86.67 SuperGroup 1161 23.12
InterContinental Hotels Group 2221 81.44 Chemring Group 217.25 25.21
Provident Financial 2095 79.62 CSR  563.5 27.17
Royal Dutch Shell 2368 77.89 WS Atkins 1257 28.38
Heritage Oil 315.2 74.59 Serco Group 346.4 28.44
Premier Oil 341 72.66 Petropavlovsk  66.25 29.64

 

Copper miner Antofagasta has finished with its latest bounce and is now dropping back towards 52-week lows. Although the price of the red metal has gained in recent weeks concerns about output from Antofagasta remain, and this is driving the share price lower. In my view, 765p and the 750p are the short term targets on the downside to watch.

Highs/Lows**

Company

Share Price

% off 52-week high

Company

Share Price

% off 52-week low

AZ Electronic Materials SA 410 0.00% Mothercare 164 1.39%
National Grid 847.5 -0.24% Experian 1053 3.24%
Imperial Tobacco Group 2596 -0.35% Centrica 315.8 4.40%
InterContinental Hotels Group 2221 -0.49% Dairy Crest Group 467.3 4.75%
Royal Dutch Shell

2368

-0.71% International Public Partnership 130 5.26%
United Utilities Group 820.5 -0.79% Antofagasta 772.5 5.39%
Heritage Oil 315.2 -0.85% GlaxoSmithKline 1613 5.56%

 

*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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