MIDCAP-Thailand's Preecha technicals suggest reversal

Wed Feb 8, 2012 7:51am GMT

Feb 8 (Reuters) - Thailand's Preecha Group is trading at overbought levels and technical charts point to a reversal.

The stock's Relative Strength index, a momentum oscillator, shows a negative divergence and is at 76. A level above 70 is considered overbought.

Shares in the real estate developer hit a high of 1.41 baht, their strongest level since August 2010.

The Average Directional Index which measures the strength of the current trend is at 74. A reading above 50 generally indicates a stock is overbought.

For a technical view: link.reuters.com/tad56s

CONTEXT:

The stock has outperformed the benchmark SET Index so far this year. It has gained about 27 percent in a broader market up about 8.0 percent.

A negative divergence occurs when a stock touches a new high but its technical indicators such as the RSI moves lower, indicating an impending reversal in the stock price. (Reporting by Rajesh Chandnani; Editing by Anshuman Daga)

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