NRG Energy (NRG) stock continues to trade at a huge premium to its moving average levels. The stock currently seems strong, as it is trading 17% and 27% above its 50-day and 200-day moving averages, respectively. Both these levels may now act as a support in the short term. The stock’s 50-day moving average crossed above its 200-day moving average, which can be considered a bullish sign in the short term.
We can analyze moving averages in two ways: via price crossover or via two or more moving averages. The first method suggests that when a stock’s price exceeds a particular moving average, it’s a bullish sign and vice versa. The second method tells us that when a stock’s shorter moving average crosses over its longer moving average, it’s a “buy” signal for the stock.
Relative strength index
NRG Energy stock currently has an RSI (relative strength index) of 64. It has been trading mostly in the overbought zone so far in 2017. 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 and can hint at an imminent reversal in the stock’s price.
NRG Energy stock rose on expectations of unlocking value for shareholders that surfaced after Elliott and Bluescape bought stakes in the troubled power producer. Peer Dynegy (DYN) rose 8% while Calpine (CPN) is flat so far in 2017. NRG surged more than 40% in the same period.