In trading on Thursday, shares of MEMC Electronic Materials, Inc. (WFR) entered into overbought territory, changing hands as high as $4.93 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 MEMC Electronic Materials, Inc., the RSI reading has hit 70.2 — by comparison, the RSI reading for the S&P 500 ETF (SPY) is presently 72.1.
Investors could look at WFR's 70.2 reading as a sign that the recent heavy buying is overdue to take a breather, which could bring a pullback in the stock. The chart below shows the one year performance of WFR shares:
Looking at the chart above, WFR's low point in its 52 week range is $3.65 per share, with $15.04 as the 52 week high point — that compares with a last trade of $4.88.
According to the ETF Finder at ETF Channel, WFR makes up 9.84% of the Solar Energy ETF (AMEX:KWT) which is trading relatively unchanged on the day Thursday.
WFR operates in the Semiconductors sector, among companies like Diodes, Inc. (NASDAQ:DIOD) which is down about 0.4% today and has a current RSI reading of 61.2. Below is a three month price history chart comparing the stock performance of WFR, versus DIOD.
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