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A Closer Look at SAP’s Relative Strength and Volatility

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SAP’s RSI

In the previous article, we discussed select technical indicators for SAP (SAP). Let’s now take a look at SAP’s RSI (relative strength index), one of the most widely used technical indicators. SAP’s 14-day RSI is 74, indicating that the company’s stock is overbought and may fall soon.

An RSI figure of below 30 suggests that a stock has been oversold and may rise in the near future. An RSI figure of higher than 70 indicates that a company’s stock has been overbought and is likely to fall soon.

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SAP’s ATR and volatility

SAP’s ATR (average true range) value is ~1.58. Investors and traders use ATR in technical analysis to determine the volatility of a stock. The metric is helpful in aligning investment choices with risk profiles. High volatility or high ATR readings are likely to be seen during downtrends and are thus indicators of a possible trend change. Low volatility or low ATR readings are usually witnessed during uptrends and correspond to weaker trend movements.

SAP stock has a beta of ~1.26, which indicates that it’s ~26% more volatile than the overall market. When a stock’s beta is higher than 1.0, it’s usually viewed as more volatile than the overall market.

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