The RSI indicator suggests: Buy Halliburton stock, Buy EnteroMedics stock and Sell ALCOA stock.
The Relative Strength Index (RSI) is a commonly used momentum indicator to identify overbought or oversold conditions in the trading of a stock. Investopedia defines it as "The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder, that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security." The RSI indicator can be used to identify buy/sell signals in the market. Some of today's notable RSI stock trade signals are Halliburton Company (NYSE:HAL), EnteroMedics Inc (NASDAQ:ETRM) and ALCOA CORP (NYSE:AA).
Halliburton Company (NYSE:HAL) stock becomes heavily oversold. Time for a rebound?
Shares of Halliburton Company have been falling continuously despite a positive earnings report for the second quarter of 2017. HAL stock had initially registered an uptick post earnings but since July 26 it has lost nearly 6% of their value. The decline in Halliburton share price may soon come to an end as the stock is oversold zone. The present RSI measure for Halliburton stock is 17.45, well above the commonly used oversold threshold measure of 30. Further, the share price is just a few cents away from the lower Bollinger Band and the stock could be soon in oversold territory as per Bollinger Bands indicator too. The combination of both momentum indicators is generally considered a strong signal and this could mean the recent downtrend in HAL stock is coming to an end.
EnteroMedics Inc (NASDAQ: ETRM) stock may have hit the bottom.
EnteroMedics Inc stock has been in a free fall losing nearly 25% of its value in the last one month alone. With ETRM stock entering oversold territory, a bottom could be in sight. The RSI value of stock stands at 29.5, just below the common oversold threshold measure of 30. For EnteroMedics stock, Bollinger Bands indicator is also flashing an oversold signal. The share price of the company has already fallen below the lower Bollinger Band to flash an oversold signal. This further increases the probability that ETRM stock may bottom out soon. As mentioned above, the combination of the two signals is a strong signal.
Alcoa Corp (NYSE:AA) stock is overbought.
ALCOA CORP stock's recent continuous uptrend has resulted in it becoming overbought. AA stock is up over 11% since the last week of July. The RSI measure of the stock suggests it is in overbought zone. The present RSI measure of Alcoa Corp stock is above the generally used overbought threshold measure of 70, coming in at 71.94. The share price has also breached the upper Bollinger Band signaling an overbought signal. The upside in AA stock from here could be limited.
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