Oversold Conditions For Rocky Mountain Dealerships (RME)

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 Monday, shares of Rocky Mountain Dealerships Inc (TSX: RME.TO) entered into oversold territory, hitting an RSI reading of 28.7, after changing hands as low as $10.35 per share. By comparison, the current RSI reading of the S&P/TSX Composite Index is 31.7. A bullish investor could look at RME's 28.7 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 RME shares:

START SLIDESHOW:
Click here to find out which 9 other oversold Canadian stocks you need to know about »

Rocky Mountain Dealerships Inc 1 Year Performance Chart

Looking at the chart above, RME's low point in its 52 week range is $10.35 per share, with $13.63 as the 52 week high point — that compares with a last trade of $10.35.

More from Stocks

Video: Here Is Why Carvana Isn't Worried About Amazon

Video: Here Is Why Carvana Isn't Worried About Amazon

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

Dow Posts First Gain in Nine Sessions; Oil Jumps

Dow Posts First Gain in Nine Sessions; Oil Jumps