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 Sturm, Ruger & Co., Inc. ( RGR - Get Report) entered into oversold territory, hitting an RSI reading of 28.4, after changing hands as low as $36.65 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 75.2. A bullish investor could look at RGR's 28.4 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 RGR shares: Looking at the chart above, RGR's low point in its 52 week range is $36.57 per share, with $85.93 as the 52 week high point — that compares with a last trade of $36.90.
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
Twitter, Coca-Cola, Verizon, Tesla and Facebook - 5 Things You Must Know
U.S. stock futures are down slightly ahead of the next wave of corporate earnings reports; Procter & Gamble, Coca-Cola and Verizon are just some of the big names posting earnings Tuesday; Tesla's Elon Musk says cars produced with Tesla's 'full self-driving' system will comprise a fleet of robotaxis of "over 1 million" by the end of 2020.
Stocks Mixed With US Earnings in Focus: Oil Extends Gains on Iran Sanctions
Global stocks edged higher Tuesday, as oil extended gains to fresh 2019 peaks, ahead of the next wave of corporate earnings that could set U.S. equity markets up for another record run and text the Federal Reserve's patience on future rate hikes.