Does Calpine’s Chart Indicators Hint More Downside Ahead?
Let’s see where Calpine (CPN) stock might go in the near future. The stock is currently trading at a deep discount to its moving averages, which indicates a weakness. On March 27, 2017, CPN stock was trading 6.0% and 13.0% below its 50-day and 200-day moving averages, respectively. Its 50-day moving average at about $11.40 may now act as a resistance in the short term.
When a stock exceeds a particular moving average, it’s a bullish sign, and vice versa. When a stock’s shorter moving average crosses over its longer moving average, it’s considered a “buy” signal for the stock.
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Relative strength index
Calpine’s RSI (relative strength index) stands at 41. The RSI is a momentum indicator made up of values between 0 and 100. Movements below 30 are in the “oversold” zone, while movements above 70 are in the “overbought” zone. RSI values at the extremes can hint at an imminent reversal in the stock price.
Short interest in Calpine rose nearly 5.0% on March 15, 2017. Total shorted shares in the company were 27.7 million on February 28, 2017, rising to 29.1 million by mid-March 2017. A rise in short interest can mean that more investors are expecting the stock to fall in the near term.
Remember, short interest indicates the number of a company’s shares that have been sold short and haven’t been covered. The number also helps track investor sentiment.