New World Resources Declines on Overbought Signal: Prague MoverKrystof Chamonikolas
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.