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 Spark Networks Inc ( LOV) entered into oversold territory, hitting an RSI reading of 29.2, after changing hands as low as $5.121 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 49.8. A bullish investor could look at LOV'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 LOV shares: Looking at the chart above, LOV's low point in its 52 week range is $4.26 per share, with $8.59 as the 52 week high point — that compares with a last trade of $5.13.
More from Stocks
White House Claims Trump Regretted Not Raising China Tariffs Higher
A White House spokeswoman reportedly said over the weekend that the president wished he had hiked tariffs on China higher, days after threatening to up the tax by 5% on $550 billion in imports.
Jim Cramer: A Cold War With China Is Worth Avoiding
I wish I could say buy this dip. But the dip is one that's not necessarily going to have an ending today.