EIL, Esab among 10 overbought stocks with RSI above 70
Relative Strength Index (RSI), a powerful technical indicator that helps assess the momentum and strength of a stock's price movements. In this article, we delve into the concept of overbought stocks, explore the importance of RSI in assessing stock movements, and analyze 10 handpicked stocks by ETMarkets that were trading in an overbought zone on Monday, July 31st. The RSI is a momentum oscillator that quantifies the speed and magnitude of stock price movements.
It is calculated based on the average gains and losses over a specified period, typically 14 days. RSI values range from 0 to 100, with values above 70 indicating an overbought condition, suggesting that the stock's price may have risen too quickly and could experience a correction.Importance of Assessing Stock Movement Based on RSI Assessing stock movement based on RSI is vital for investors to make prudent decisions. When a stock's RSI rises above 70, it indicates that the stock may be overbought and could be due for a pullback or correction.
Overbought conditions suggest that the stock's price has risen too rapidly and may not be sustainable in the short term. As a result, investors should exercise caution when dealing with overbought stocks to avoid potential losses. ETMarkets' Top 10 Picks: Stocks in Overbought Zone: On Monday, July 31st, StockEdge reported that over 120 stocks were trading in an overbought zone.
From this extensive list, ETMarkets has carefully selected 10 stocks that investors should be cautious about:Engineers India Ltd. — RSI: 87.33, Prev. RSI: 85.86Esab India Ltd.
— RSI: 86.58, Prev. RSI: 89.97Sterling and Wilson Renewable Energy Ltd. — RSI: 86.56, Prev.
RSI: 84.41Tata Motors Ltd. — DVR Ordinary — RSI: 86.35, Prev. RSI: 86.21Cipla Ltd.
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