In trading on Thursday, shares of Magnum Hunter Resources Corp (NYSE:MHR) entered into overbought territory, changing hands as high as $5.97 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 Magnum Hunter Resources Corp , the RSI reading has hit 70.7 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 55.2, the RSI of WTI Crude Oil is at -1.0, and the RSI of Henry Hub Natural Gas is presently 41.1.
Investors could look at MHR's 70.7 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), MHR's low point in its 52 week range is $2.33 per share, with $8.66 as the 52 week high point — that compares with a last trade of $5.96. Magnum Hunter Resources Corp shares are currently trading up about 1.8% on the day.
According to the ETF Finder at ETF Channel, MHR makes up 1.83% of the ETF (AMEX:XOP) which is trading lower by about 1.4% on the day Thursday.
MHR operates in the Oil & Gas Exploration & Production sector, among companies like EQT Corp. (NYSE:EQT) which is off about 0.2% today, and Noble Corp (NYSE:NE) trading lower by about 2.7%. Below is a three month price history chart comparing the stock performance of MHR, versus EQT and NE.
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