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Is NRG Energy Stock at Critical Levels?

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Is NRG Energy Stock at Critical Levels? PART 1 OF 3

What Do NRG Energy’s Chart Indicators Show?

NRG Energy’s RSI 

Leading merchant power stock NRG Energy (NRG) has been on a bull run since the beginning of the new year. So far, the stock has gained nearly 20% this month. The stock is outperforming peers by a huge margin. The breakout in the last few trading sessions led to an abnormal rise in its RSI (relative strength index). Currently, it stands near 88. The RSI at the beginning of the month was 45.

The RSI is a momentum indicator made up of values between zero and 100. Movements below 30 are considered to be in the “oversold” zone. Movements above 70 are considered to be in the “overbought” zone. They can hint at an imminent reversal in the stock’s price. NRG Energy’s RSI has been above 70 in the last four consecutive trading sessions.

What Do NRG Energy’s Chart Indicators Show?

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Moving averages

As of January 16, 2017, NRG stock was trading at a 19% and 11% premium to its 50-day and 200-day moving averages, respectively. The strong premium to both its moving average levels highlights the stock’s strength. Both of these levels could act as a support in the near future.

Moving averages show that when a stock rises above a particular moving average, it’s a bullish sign. When it falls below that average, it’s bearish.

NRG Energy stock has recovered by more than 65% from its 52-week low of $8.73. It’s still at a 20% discount from its annual peak of $18.23.

The recovery in the merchant stocks wasn’t limited just to NRG Energy. Dynegy (DYN) and Calpine (CPN) also showed good momentum. So far, Dynegy rose 20%, while Calpine rose 10% in January.

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