The Kroger Co. (NYSE:KR)’s stock price recently reached $34.10 in a recent trade. The stock’s relative strength index (RSI) stands at 50.01.
Relative Strength Index (RSI) is an overbought/oversold technical oscillator that compares the performance of a stock to itself over time, not to be confused with “relative strength”, which compares a stock to another. RSI was developed by J. Welles Wilder, Jr., an engineer turned technical analyst. Along with creating several other technical indicators used by countless traders and professionals such as Average True Range (ATR), The Relative Strength Index (RSI), Average Directional Index (ADX) and The Parabolic SAR., Wilder is considered to be a celebrity in the trading world.
Wilder started his career as a mechanical engineer, who also invested in real estate. In 1970, he sold his real estate stake to his partners for $100,000. He then took up market research and trading, enjoying silver futures the most. He has authored several books on trading, publishing “New Concepts in Technical Trading in 1978, “The Adam Theory of Markets or What Matters Is Profit” in 1987 and “The Delta Phenomenon: or The Hidden Order in All Markets” in 1991.
Though it might seem counter-intuitive, technical analysts don’t care about the value of a company, instead they use historic price data to observe patterns and then predict the future direction of that price. Similar to fundamental analysis, they use common ratios and formulas to achieve this, though they use stock price and change rate to measure volatility, where fundamental analysists compare companies to one another. Stock prices change on a daily basis, so for this reason, technical analysis is a shorter term analysis as compared to the longer-term fundamental approach.
In terms of trading signals, RSI moving above the horizontal 30 reference level is typically viewed as a bullish indicator, while the RSI moving below the horizontal 70 reference level is seen to be a bearish indicator. The 50 level represents neutral momentum. A stock is typically considered to be under overbought conditions when the RSI moves above 70 and oversold when it drops under 30.
The stock stands 1.44% away from its 50-day simple moving average and also 0.96% away from the 200-day average. Recently, the commodity stands -16.41% away from the 52-week high and 19.22% from the 52-week low.
EPS and RECOMMENDATION
Analysts have placed a 2.20 on the stock, which is based on a 1 to 5 scale where 1 represents a Strong Buy and 5 a Strong Sell. The same analysts have a future 12 month price target of $35.82 on the shares.