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 FreightCar America Inc ( RAIL - Get Report) entered into oversold territory, hitting an RSI reading of 29.9, after changing hands as low as $26.23 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 74.5. A bullish investor could look at RAIL'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 RAIL shares: Looking at the chart above, RAIL's low point in its 52 week range is $21.02 per share, with $37.48 as the 52 week high point — that compares with a last trade of $26.49. According to the ETF Finder at ETF Channel, RAIL makes up 2.84% of the First Trust RBA American Industrial Renaissance ETF ( AIRR) which is trading lower by about 3.2% on the day Monday.
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
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.
How a Chinese Restriction on 'Rare Earths' Could Threaten Apple
China is the world's supplier of rare earths. Export restrictions could be bad news for Apple investors.
Amazon Is Headed to $3,000 a Share, Says Bullish Piper Jaffray Note
The firm estimates Amazon will cross $3,000 a share sometime between mid-2021 and mid-2022.
Buy Alibaba Shares on the Dip, Says Stifel, Adding It to Select List
Stifel says long-term trends working in Alibaba's favor are more significant than the trade war between the U.S. and China.