Day Trading Ideas Based On RSI indicator: Buy Allergan stock, Buy AEterna Zentaris stock and Sell Home Depot stock.
The Relative Strength Index (RSI) is a technical analysis tool which is used to measure the speed and change of price movements of a security. Readers can go through our article to know more about how to use RSI for trading. The RSI indicator can be used to identify buy/sell signals in the market by discovering overbought or oversold conditions in the trading of a stock. Some of today's notable RSI stock trade signals are Allergan (NYSE:AGN), Aeterna Zentaris (NASDAQ:AEZS) and Home Depot (NYSE:HD). If you're a trader, you should check out our daily trading ideas section for daily, free updates on the latest crossovers and other popular technical signals.
The recent downtrend in Allergan plc Ordinary Shares (NYSE:AGN) could be coming to an end.
Shares of Allergan have been on a continuous decline over the last fortnight, losing more than 7% of their values. The downtrend was further boosted by bearish crossovers of AGN stock. The stock made multiple bearish crossovers over the last fortnight and is presently trading below all its key Simple Moving Averages, be it the 20-day, 50-day or the 100-day SMA. Further, AGN shares also saw a bearish MACD crossover recently. In a bearish move, the MACD line fell below the center line. However, the downtrend in Allergan shares could be coming to an end as the stock is in oversold territory. The RSI indicator is flashing an oversold signal for AGN stock. The RSI value of the stock has fallen to 28.34, which is below the commonly use oversold RSI measure of 30. AGN shares are further supported by the fact that the Bollinger Bands indicator is also flashing an overbought signal. Allergan's share price has breached the lower Bollinger Band, which is considered an oversold signal.
A bottom could be around the corner for AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) stock.
After being in a steep decline since the last week of July, AEterna Zentaris Inc. (USA) could find some respite if its latest earnings lifts the stock. AEterna stock is down nearly 38% since July 21. All eyes are on the company's Q2 earnings to stem the rot in AEZS stock. Analysts expect the company to report a Non-GAAP loss per share of 38 cents on a revenue of $.22 million. An earnings beat could reverse the fortunes of the stock. The chances of a revival are further boosted by the fact that AEterna Zentaris stock is in oversold zone as per the RSI indicator. The present RSI measure of the stock stands below the generally used oversold threshold of 30, at 24.75. A bottom for the stock could be around the corner. However, Bollinger Band indicator is yet to flash an oversold signal for the AEZS stock.
Home Depot Inc (NYSE:HD) stock is overbought ahead of Q2 earnings next week.
Shares of home improvement supplies retailing company, Home Depot Inc have become overbought ahead of its second quarter earnings next week, on August 15, after market close. Wall Street expects the company to report adjusted Earnings Per Share of $2.21 and a revenue of $27.8 billion. The RSI indicator measure is not good news for the stock before its earnings release. The present RSI measure for HD stock has shot to 80.06, much above the generally used overbought threshold measure of 70, hinting an overbought condition. Further, the share price is also very close to the upper Bollinger Band to signal an overbought condition. Generally, the combination of RSI and Bollinger Band is considered as a strong signal. if both flash an overbought condition before earnings, that is not a good sign and it could be a strong hint that the post earnings upside could be limited.
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