Day Trading Ideas Based On RSI indicator: Buy Macy's Stock, Starbucks Stock and Sell DryShips stock.
The Relative Strength Index (RSI) indicator is a popular tool used by many Wall Street traders. For the benefit of those who are not much acquainted with RSI, here's an article that will help you know more about how to use RSI for trading. The most prominent technical trading ideas for today are Macy's (NYSE:M), Starbucks Corporation (NASDAQ:SBUX) and AVEO Pharmaceuticals (NASDAQ:AVEO). For more such day trading ideas, check out our daily trading ideas section.
Has Macy's Inc (NYSE:M) stock bottomed to buy again?
Macy's stock witnessed a sell off after the company reported its second-quarter results last week on Thursday, Macy's shares have lost more than 13.5% of their value in the last 5 trading days. The company did beat expectations, but the guidance for the full year was not enough to offset negative investor sentiment around the industry. The stock could be nearing a bottom for investors who want to buy the stock at low levels. A bottom could be in sight, as Macy's 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 25.39. Further, the share price has also fallen below the lower Bollinger Band flashing an oversold signal. With both RSI and Bollinger Bands indicators showing an oversold signal, Macy's stock could be soon approaching the bottom.
The downtrend in Starbucks Corporation (NASDAQ:SBUX) stock could be soon coming to end.
Shares of Starbucks could soon end their post earnings woes. SBUX stock is down more than 10% since its third quarter earnings release in July last week. Starbucks suffered its biggest share price decline in almost 2 years after cutting its guidance, renewing fears about sputtering growth at the world’s largest coffee chain. The decline could soon come to an end as Starbucks shares have become oversold, according to the Relative Strength Index (RSI) indicator. The RSI value of the stock has fallen to 28.73, which is below the commonly used oversold RSI measure of 30. The Bollinger Band indicator signal also could soon flash an oversold signal as the share price is very close to the lower Bollinger Band. Investors should tread cautiously here before making any move.
The upside in AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) stock could be limited from here.
Shares of AVEO Pharmaceuticals are already up by more than 23% in August. The upside potential from here could be limited. The RSI measure is not good news for the stock's upside potential. The present RSI measure for AVEO stock has shot to 75, much above the generally used overbought threshold of 70, hinting an overbought condition. Further, the share price has also breached the upper Bollinger Band to signal an overbought condition. Generally, the combination of RSI and Bollinger Band is considered as a strong signal and now both are flashing an overbought condition. This is not a good sign and it could be a strong hint that the upside in AVEO shares could be limited.
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