In trading on Monday, shares of Synalloy Corp. (SYNL) entered into oversold territory, changing hands as low as $13.80 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Synalloy Corp., the RSI reading has hit 29.7 — by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 52.2, the RSI of Spot Gold is at 48.7, and the RSI of Spot Silver is presently 51.8.
A bullish investor could look at SYNL's 29.7 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), SYNL's low point in its 52 week range is $12.26 per share, with $17.38 as the 52 week high point — that compares with a last trade of $14.82. Synalloy Corp. shares are currently trading off about 10% on the day.