SGU Crosses Critical Technical Indicator

In trading on Tuesday, shares of Star Gas Partners L.P. ( SGU) entered into oversold territory, changing hands as low as $5.70 per share. We define oversold 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 oversold if the RSI reading falls below 30.

In the case of Star Gas Partners L.P., the RSI reading has hit 28.4 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 50.6, the RSI of WTI Crude Oil is at 32.2, and the RSI of Henry Hub Natural Gas is presently 42.8.

START SLIDESHOW:
Click here to find out which 9 other oversold energy stocks you need to know about »

A bullish investor could look at SGU's 28.4 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.

Looking at a chart of one year performance (below), SGU's low point in its 52 week range is $4.63 per share, with $7.24 as the 52 week high point — that compares with a last trade of $5.71. Star Gas Partners L.P. shares are currently trading off about 3.7% on the day.

Star Gas Partners L.P. 1 Year Performance Chart

If you liked this article you might like

How Investors Can Generate Yields from MLPs

How Investors Can Generate Yields from MLPs

These 7 Small-Cap Growth Stocks Have Big Upside Potential in 2017

These 7 Small-Cap Growth Stocks Have Big Upside Potential in 2017

Bad News for Income-Seeking Investors

Bad News for Income-Seeking Investors

'Mad Money' Lightning Round: Sell, Sell, Sell, Goodyear and Move On

'Mad Money' Lightning Round: Sell, Sell, Sell, Goodyear and Move On

Jim Cramer's 'Mad Money' Recap: We're Not Out of the Woods Yet

Jim Cramer's 'Mad Money' Recap: We're Not Out of the Woods Yet