IVR - INVESCO MORTGAGE CAPITAL INC

Industry: REIT - Diversified Sector: Financial

Strong Buy Candidate
Wed 26'th Apr 2017

PERIOD COVERED
2017-01-27 - 2017-04-26
CHANGE
1.23%
PRICE
$16.45
VOLUME
Buy
TREND
Buy
MV LONG
Buy
MV SHORT
Buy
PIVOT
Buy
MACD
Sell
Request Prediction
0.00%
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INVESCO MORTGAGE CAPITAL INC Stock Analysis

Technical stock analysis for Wed 26'th Apr 2017

Buy candidate since 2017-04-06 Gain 5.65%

INVESCO MORTGAGE CAPITAL INC gained 1.23% in the last trading day, rising from USD 16.25 to USD 16.45 , and has now gained 10 days in a row. It is not often that stocks manage to gain so many days in a row, and falls for a day or two should be expected. The price has risen in 9 of the last 10 days and is up by 3.85% over the past 2 weeks. Volume has increased in the last day along with the price, which is a positive technical sign, and, in total, 0.39 million more shares were traded than the day before. In total, 1.14 million shares bought and sold for approximately USD 18.79 million.

Trend

INVESCO MORTGAGE CAPITAL INC has broken the weak rising the short-term trend up and an even stronger rising rate is indicated. For any reaction back there will now be support on the roof on the current trend broken at USD 16.36, a level that may pose a second chance to hit a runner. According to fan-theory USD 17.48 will be the next possible trend-top level and thereby pose a resistance level which may not be broken at the first attempt.

Signals

Only positive signals in the chart today. INVESCO MORTGAGE CAPITAL INC 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 16.12 and USD 15.49. A break down below any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point on Friday March 24, 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.

The stock had a Golden Star Signal* on Monday December 05, 2016 in the mediumterm chart.

* Golden Star Signal* is when the short-term moving average, the long-term moving average, and priceline meet in a special combination. This combination is very rare and often followed by long and strong gains for the stock in question.

Relative Strength Index (RSI)

RSI14 is 87 and the stock is extremely overbought on RSI14, but may also ontinue to gain. Some stocks see their best performance while being overbought, but very seldom does RSI remain so high for a long time without short corrections. Risk has therefore increased and larger daily movements can be expected for the next couple of days.

Support & Resistance

On the downside, the stock finds support just below today's level from accumulated volume at USD 15.57 and USD 15.53. There is no resistance from accumulated volume above today's level and given the right condition the stock may perform very well during the next couple of days.

There is natural risk involved when a stock is testing a support level, since if this is broken, the stock then may fall to the next support level. In this case, INVESCO MORTGAGE CAPITAL INC finds support just below today's level at 15.57. If this is broken, then the next support from accumulated volume will be at 15.53 and 15.31.

Risk

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 0.33 (2.03%) between high and low. For the last week, the stock has had a daily average volatility of 1.56%.

The stock is extremely overbought on RSI14 (87). Normally this will pose a good selling opportunity, but since the stock has broken the trend up the chance for a major correction due to high RSI is very small as the stock will find support at the trend broken. Since the INVESCO MORTGAGE CAPITAL INC has been rising for 10 days in a row, the risk for the next couple of days has increased. We don't expect a major reaction as the stock is in very good shape technically, and therefore hold a positive evaluation despite the very short term risk.

Our recommended stoploss: USD 15.61 (-5.08%) (This stock has low daily movements and this gives low risk. The RSI14 is 87 and this increases the risk substantially. There is a buy signal from pivot bottom found 22 days ago.)

Evaluation

INVESCO MORTGAGE CAPITAL INC holds several positive signals and has broken the weak rising trend up. As the stock is also in great technical shape, we therefore consider it to be a good choice at these current levels and we are expecting further gains during the next 3 months. We have upgraded our recommendation for this stock since last evaluation from a Hold/Accumulate to a Strong Buy Candidate.

Strong Buy Candidate

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