Let’s take a look at where the Alerian MLP ETF (AMLP) might go in the near future. AMLP is trading at $9.6, which is almost 2% above its 50-day moving average and 6% below its 200-day moving average. The recent strength has brought AMLP above its 50-day moving average level, which could act as a support in the short term. However, AMLP’s 200-day level close to $10.2 is expected to act as resistance going forward.
Relative strength index
AMLP has increased almost 15% in the last two weeks. The increase has brought AMLP near the overbought zone. Currently, AMLP is trading at an RSI (relative strength index) of 70. The RSI is a momentum oscillator that takes values from zero to 100. A stock is considered “oversold” when its RSI score falls below 30 and “overbought” when it rises above 70. An extreme RSI value can imply an impending reversal in a stock’s direction.
The short interest in AMLP remained fairly unchanged as of December 14. On November 30, the total shorted shares in AMLP were 33.4 million. The total shorted shares on December 14 were 33.5 million. The short interest reflects the number of shares that have been sold short and not yet squared off. The short interest measures investors’ anxiety.