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AAPL vs. INTC: The tale RSI can tell

The RSI (relative strength indicator) can be very helpful in understanding a stock’s momentum and where it is trending. We discussed how to use Stock TickerPicker to evaluate a stock’s RSI indicator here. In this article, we’ll examine a few specific stocks that have been in the news lately.

 

 

 

AAPL has been on an upward tear for a while now. As of this writing, it has gone up nearly 50 points in the past month. Does it have more room to run? Perhaps, but its technicals are starting to not look good.

The RSI has been consistently overbought (70 or higher) for most of the past month, dipping down towards 50 only briefly. So this tells us its momentum has been incredibly strong – almost too strong. Looking at the stock chart and the bollinger bands, we can see, however, that only just recently has it really been pushing the upper band and beyond. I read this chart as AAPL going to consolidate its position here for a little while before perhaps continuing its march upwards.

INTC tells almost the opposite story:

Its RSI has been down around 30 (oversold) for most of the past month, as the economy and iPad encroachment on its core business pressure the stock. Given how low the RSI is, however, it does seem like maybe it is due for a little rebound. What do the Bollinger Bands say? Currently INTC is just above the bottom band, and well below its 200-day moving average. So while it isn’t finding price support due to a moving average, this seems to echo the RSI with its oversold message. I say INTC finds support around the $23 level for a little while.

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