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New World Resources Declines on Overbought Signal: Prague Mover

Jan. 3 (Bloomberg) -- New World Resources Plc, the biggest Czech producer of coking coal, headed for its biggest decline in more than three weeks on speculation the rally to near a six-month high was overdone.

NWR slid 1.4 percent to 99.60 koruna by 12:30 p.m. in Prague. A close at that level would mark the steepest one-day retreat since Dec. 11.

Basic resources companies fell in Europe today after leading gains yesterday on optimism about the global recovery following a U.S. budget agreement. NWR’s 3.5 percent jump to the highest since July 19 yesterday lifted the stock’s 14-day relative strength index to 80, above the 70 level at which technical analysis signals a decline.

“The drop in NWR shares is driven by technical factors after recent increases,” Marek Hatlapatka, an analyst at Cyrrus AS brokerage in Brno, Czech Republic, wrote in e-mailed comments today. “The weather in Europe is unusually warm, which is hurting the price of thermal coal.”

The RSI for NWR shares fell to 73 today.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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