New Gold Stock Becomes Very Oversold
IDuring Tuesday’s trading, shares of New Gold Inc (ticker: NGD) entered oversold territory, changing hands as low as $1.49 per share. We define oversold 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 oversold if the RSI reading falls below 30.
In the case of New Gold Inc, the RSI reading hit 29.4 – by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 38.1, the RSI of Spot gold is at 34.4, and the RSI of cash money is currently 34.1. A bullish investor might take NGD’s 29.4 reading as a sign that the recent selloff is running out of steam and starting to look for entry point opportunities on the buy side.
Looking at a one-year performance chart (below), NGD’s low point in its 52-week range is $1.01 per share, with $2.23 as its 52-week high – compare with a final trade of $1.51. Shares of New Gold Inc are currently trading around 1.9% higher on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.