Strong Buy Candidate
Wed 26'th Apr 2017
AMERISAFE Stock Analysis
Technical stock analysis for Wed 26'th Apr 2017
Buy candidate since 2017-04-19 Gain 2.79%
AMERISAFE is the upper part of a wide and horizontal trend and normally this would pose a good selling opportunity, but a break-up through the top trend line at USD 67.56 will give a strong buy signal and a trend shift may be expected. Given the current horizontal trend you can expect AMERISAFE with 90% probability to be traded between USD 60.10 and USD 67.15 at the end of this period with 90% probability. A break of a horizontal trend is often followed by a large increase in the volume, and stocks seldom manage to go directly from the bottom of a trend up to the roof. Stocks turning up in the middle of a horizontal trend are therefore considered to be potential runners.
Only positive signals in the chart today. AMERISAFE holds buy signals from both short- and long-term moving averages. In addition, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average. On corrections down there will be some support from the lines at USD 65.20 and USD 64.11. A break down below any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point on Thursday April 06, 2017, which indicates further gains until a new top pivot has been found. Volume is rising along with the price. This is considered to be a good technical signal.
Relative Strength Index (RSI)
The stock holds a RSI14 at 79 and is currently being overbought on RSI. This does not have to be a sales signal as many stocks may go both long and hard while being overbought on the RSI. It is therefore important to evaluate the history of the share as it may tell you something about the RSI-sensitiveness.
Support & Resistance
AMERISAFE finds support from accumulated volume at USD 64.75, USD 63.75, and USD 63.65. On the upside the stock meets some resistance just above today's level from accumulated volume at USD 66.45, USD 67.85 and USD 66.35.
The stock is about to test the resistance from accumulated volume at USD 66.45 and this may cause the stock to take a minor break or get into a more sideways move for a few days.
This stock is usually traded at good volume, and with minor daily changes the risk is considered to be low. During the last day, the stock moved USD 1.45 (2.20%) between high and low. For the last week, the stock has had a daily average volatility of 1.97%.
The stock is overbought on RSI14 and lies in the upper part of the trend. Normally this will pose a good selling opportunity for the short-term trader, but some stocks may go long and hard while being overbought and the RSI is still moving upwards. Regardless, the high RSI together with the trendposition increases the risk and higher daily movements (volatility) should be expected. A correction down in the nearby future seems very likely, and it is of great importance that the stock manages to break the trend before that occurs.
Our recommended stoploss: USD 63.35 (-4.37%) (This stock has low daily movements and this gives low risk. The RSI14 is 79 and this increases the risk substantially. There is a buy signal from pivot bottom found 13 days ago.)
AMERISAFE holds several positive signals and is considered to be a good choice at current levels. We expect the stock to perform great in the short-term period. We have upgraded our recommendation for this stock since last evaluation from a Hold/Accumulate to a Strong Buy Candidate.