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 Wednesday, shares of Coastal Contacts Inc ( COA) entered into oversold territory, hitting an RSI reading of 27.5, after changing hands as low as $4.44 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 60.5. A bullish investor could look at COA's 27.5 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 COA shares: Looking at the chart above, COA's low point in its 52 week range is $4.44 per share, with $7.68 as the 52 week high point — that compares with a last trade of $4.49.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Stocks
Paysign Falls Sharply Following BTIG Downgrade on Valuation
The firm now has a neutral rating on shares of the prepaid card processing service provider.
Sotheby's to Be Bought by BidFair for $3.7 Billion
Famed auction house Sotheby's hits the gavel on itself on Monday, announcing it has agreed to be acquired by BidFair USA, an entity wholly owned by media and telecom entrepreneur and art collector Patrick Drahi.
Dow Inc. Drops on Analyst Downgrade to Market Perform
Shares of Dow Inc. fall on Monday after receiving a downgrade from BMO Capital Markets analyst John McNulty.
United Natural Foods Is Gathering Ingredients For Opportunity
Appetite is growing for UNFI as the company is cutting debt and surpassing consensus earnings' estimates.
Ironies Aside, Facebook Cryptocurrency May Be Golden Opportunity
The company that's become a poster-child for scooping up private data is likely to benefit from launching its own cryptocurrency.