A.O. Smith manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks and water treatment products. Co. has two segments: North America and Rest of World. Co.'s Rest of World segment is mainly comprised of China, Europe and India. In North America, Co. serves residential and commercial end markets with a range of products including: water heaters, boilers, water treatment products, and other, which consists of expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, related products and parts. The Chinese water heater market comprises of electric wall-hung, gas tankless, combi-boiler, heat pump and solar water heaters.
When researching a stock like A O Smith, many investors are the most familiar with Fundamental Analysis — looking at a company's balance sheet, earnings, revenues, and what's happening in that company's underlying business. Investors who use Fundamental Analysis to identify good stocks to buy or sell can also benefit from AOS Technical Analysis to help find a good entry or exit point. Technical Analysis is blind to the fundamentals and looks only at the trading data for AOS stock — the real life supply and demand for the stock over time — and examines that data in different ways. One of these ways is called the Relative Strength Index, or RSI. This popular indicator, originally developed in the 1970's by J. Welles Wilder, looks at a 14-day moving average of a stock's gains on its up days, versus its losses on its down days. The resulting AOS RSI is a value that measures momentum, oscillating between "oversold" and "overbought" on a scale of zero to 100. A reading below 30 is viewed to be oversold, which a bullish investor could look to as a sign that the selling is in the process of exhausting itself, and look for entry point opportunities. A reading above 70 is viewed to be overbought, which could indicate that a rally in progress is starting to get crowded with buyers. If the rally has been a long one, that could be a sign that a pullback is overdue. |
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Video: RSI Indicator