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 Tuesday, shares of Vivus, Inc. ( VVUS - Get Report) entered into oversold territory, hitting an RSI reading of 23.2, after changing hands as low as $5.77 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 61.0. A bullish investor could look at VVUS's 23.2 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 VVUS shares: Looking at the chart above, VVUS's low point in its 52 week range is $5.77 per share, with $15.62 as the 52 week high point — that compares with a last trade of $6.03. According to the ETF Finder at ETF Channel, VVUS makes up 1.87% of the SPDR S&P Pharmaceuticals ETF ( XPH) which is trading up by about 0.5% on the day Tuesday.
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
Big Tech and CSX Get Railroaded: Jim Cramer on What it Means for the Markets
Jim Cramer weighs in on why he's keeping a close eye on Big Tech as Facebook, Amazon and Alphabet head to Capitol Hill, CSX's earnings and his thoughts on the financial sector post-big bank earnings.
Ask Cramer: Book Recommendations for College Grads Starting Their First Job?
Which of Jim Cramer's books does he recommend for grandchildren out of college on their first job?
Blue Apron's Rally on Beyond Meat Venture Goes Stale
Blue Apron stock gives back biggest one-day gain in six months.
Invitae Shares Rise After Famed Short-Seller Andrew Left Goes Long the Stock
Biotech adds 4% to $23.44 after Left, who's better known for his short positions, argues it can go to $100 a share.