China Southern Airlines Is Now Oversold (ZNH)

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In trading on Monday, shares of China Southern Airlines Co Ltd ( ZNH) entered into oversold territory, hitting an RSI reading of 29.2, after changing hands as low as $22.07 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 57.5. A bullish investor could look at ZNH's 29.2 RSI reading today 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. The chart below shows the one year performance of ZNH shares:

START SLIDESHOW:
Find out what 9 other oversold stocks you need to know about »

China Southern Airlines Co Ltd 1 Year Performance Chart

Looking at the chart above, ZNH's low point in its 52 week range is $20.10 per share, with $30.04 as the 52 week high point — that compares with a last trade of $22.24.

null

If you liked this article you might like

China's Stock Market Is Cratering -- Will the Pain Ripple Across Globe?

China's Stock Market Is Cratering -- Will the Pain Ripple Across Globe?

Asia's Flagship Carriers Leak Red Ink

Asia's Flagship Carriers Leak Red Ink

Taking the Budget Airline to China Could Cost You

Taking the Budget Airline to China Could Cost You

Dow Snaps Eight-Session Losing Streak With Triple-Digit Gains as Crude Jumps

Dow Snaps Eight-Session Losing Streak With Triple-Digit Gains as Crude Jumps

Stocks at Session Highs on Gains in Energy, Financials; Dow to Snap Losing Streak

Stocks at Session Highs on Gains in Energy, Financials; Dow to Snap Losing Streak