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 RRSat Global Communications Network Ltd ( RRST entered into oversold territory, hitting an RSI reading of 29.9, after changing hands as low as $7.1001 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 66.4. A bullish investor could look at RRST's 29.9 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 RRST shares: Looking at the chart above, RRST's low point in its 52 week range is $6.97 per share, with $9.60 as the 52 week high point — that compares with a last trade of $7.48.
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
Stocks Mixed on Strong Retail Sales Report and Mostly Positive Earnings
Stocks trade mixed Thursday on a strong U.S. retail sales report and mostly better-than-expected earnings.
Market Eats Up Pinterest and Zoom IPOs and Yawns at Mueller Report
The current picture of mixed action for a market still very close to its all-time highs is something to watch.
Pinterest, Zoom Surge on Debuts, But Can They Avoid Lyft's Fate?
The economics of both firms are attractive, but their valuations are very high, as is typical for tech new issues.