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
Dow Futures Rally From Tech and Trade Rout; Dollar Eases From 2-Year High
Global stocks steadied Friday as investors gingerly returned to risk markets after a bruising week of losses sparked by worries of a prolonged U.S.-China trade war and increasing signals of a slowing world economy.
Stocks Rebound, Theresa May Resigns, HP Beats - 5 Things You Must Know
U.S. stock futures rise Friday following a week of bruising losses; British Prime Minister Theresa May announces she will resign; HP Inc. rises after increasing full-year earnings guidance.
Jim Cramer Expects the Shoe to Fit When Foot Locker Reports Earnings
What should investors take away from Best Buy and L Brands earnings' reports? Jim Cramer rounds up retail and looks ahead to Foot Locker's earnings' report Friday before the bell.
Memorial Day Sale: Join Jim Cramer's Club for Investors and Save
Get 57% off on your membership to Jim's Action Alerts PLUS club for investors.
HP Shares Gain After Q2 Earnings Beat, Full Year Guidance Bump
HP shares were indicated higher Friday after the personal computing group posted stronger-than-expected second quarter earnings and lifted its full-year profit guidance thanks to a steadying printing supplies division.