In trading on Tuesday, shares of Goodrich Petroleum Corp. (NYSE:GDP) entered into overbought territory, changing hands as high as $17.31 per share. We define overbought territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be overbought if the RSI reading rises above 70.
In the case of Goodrich Petroleum Corp. , the RSI reading has hit 70.0 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 57.3, the RSI of WTI Crude Oil is at 60.1, and the RSI of Henry Hub Natural Gas is presently 38.2.
Investors could look at GDP's 70.0 reading as a sign that the recent heavy buying is peaking which could mean shares are due for a pullback.
Looking at a chart of one year performance (below), GDP's low point in its 52 week range is $9.91 per share, with $23.80 as the 52 week high point — that compares with a last trade of $17.20. Goodrich Petroleum Corp. shares are currently trading up about 3.2% on the day.
GDP operates in the Oil & Gas Exploration & Production sector, among companies like Cenovus Energy Inc. (NYSE:CVE) which is up about 1.7% today, and Devon Energy Corp. (NYSE:DVN) trading up by about 0.1%. Below is a three month price history chart comparing the stock performance of GDP, versus CVE and DVN.
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