In trading on Monday, shares of Marine Petroleum Trust (NASD: MARPS) entered into overbought territory, changing hands as high as $22.54 per share. We define overbought territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be overbought if the RSI reading rises above 70.
In the case of Marine Petroleum Trust, the RSI reading has hit 72.4 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 55.5, the RSI of WTI Crude Oil is at 58.7, and the RSI of Henry Hub Natural Gas is presently 60.6.
A bearish investor could look at MARPS's 72.4 reading as a sign that the recent heavy buying is in the process of exhausting itself, and shares are due for a pullback.
Looking at a chart of one year performance (below), MARPS's low point in its 52 week range is $18.20 per share, with $30.14 as the 52 week high point — that compares with a last trade of $22.54. Marine Petroleum Trust shares are currently trading up about 4.2% on the day.
MARPS operates in the Oil & Gas Exploration & Production sector, among companies like Denbury Resources, Inc. (NYSE: DNR) which is down about 5.8% today, and Linn Energy LLC (NASD: LINE) trading lower by about 0.8%. Below is a three month price history chart comparing the stock performance of MARPS, versus DNR and LINE.
