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 Momo Inc ( MOMO - Get Report) entered into oversold territory, hitting an RSI reading of 27.6, after changing hands as low as $10.94 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 43.4. A bullish investor could look at MOMO's 27.6 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 MOMO shares: Looking at the chart above, MOMO's low point in its 52 week range is $9.50 per share, with $19.89 as the 52 week high point — that compares with a last trade of $11.02.
More from Stocks
Stocks Back in Focus, as China Trade News Shoved Aside
Without danger of major macro news and with earnings landing, investors focus on merits of individual stocks once again.
Stocks End Up on Tentative Brexit Deal, U.S.-Turkey Ceasefire Agreement in Syria
Stocks finish higher Thursday on news of a Brexit agreement between the U.K. and the European Union, and a ceasefire agreement in Syria, but IBM's revenue miss weighed on investor sentiment.
Market Wrap: Juul Suspends Sales of Flavored e-Cigs as CDC Increases Death Toll
Philip Morris said that it was in merger talks as recently as August but cancelled those talks amid increased furor over the vaping related deaths.
Union Pacific Missed Earnings -- What This Tells Us About Economy (Nothing Rosy)
Here's why you should care about Union Pacific's earnings even if you don't own the stock.