Just saw a news blurb on Forbes.com which reports that they think NYB is 'Overbought' as indicated by their RSI. That may be the case, but why would a writer for Forbes.com Dividend Channel care to report it to the world? Oh, and thanks, Forbes for explaining to the investing world what the RSI is...
I'm kind of new to this, and bought NYB around 11. Can someone please comment on whether or not this article is an 'advertisement' meant to cast a short-term shadow on NYB? I guess the writers at Forbes.com have a short position in NYB?! Why would this be 'news' that needs to be reported?
NYB is in a basing channel going back to August. If the Forbes writer's strategy is a channel trade on dividend stocks, the call is consistent. If you trade that kind of time frame, it is probably a relevant call for you. Channel traders don't care about breakouts, they fade the channel boundaries regardless.
The 50 day SMA is flat so if you are a short term trader getting in at 11 and out around 13-13.5 is not unreasonable. (i.e. leave the long term trades to the investors) It doesn't matter what the fundamentals are really, when it hits the top end of the channel, get out. Oscillators can be useful in that regard, but just because an oscillator is overbought, doesn't at all mean it can't stay overbought for a while, especially in a trend changing situation.
I have a long term view and on a weekly chart this appears to be putting in an eventual reversal to the upside so I'm gently accumulating on weakness in the channel and collecting the dividend all the while. If it takes out the lows of the channel, that would be of more concern, but it's a long way from there currently.
gaseous, Overbought relative strength doesn't necessarily mean a selloff is coming. If the stock just stays at this level for a few days while others catch up the RSI will fall. If they don't catch up a stock can stay in overbought territory for days or weeks. On the other hand sellers could come in for a quick trade thinking it will fall.
You can find hundreds of stocks everyday with strong RSI's, just check Investors Business Daily. So I agree with you that this was a stupid article for Forbes to write. I don't know what Forbes's agenda was unless the writer is purposely trying to manipulate the stock down for personal reasons. Ralph
I don't trust FORBES investment advice at all. They are about as bad as Cramers advice on stocks. Cramers stock pick of the year last year went down about 60%. Forbes is about the same. I think your fine here. I made a few bucks this year by doing the opposite of what most of the pros say.