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 Thursday, shares of Kcg Holdings Incorporated ( KCG) entered into oversold territory, hitting an RSI reading of 29.2, after changing hands as low as $10.90 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 32.4. A bullish investor could look at KCG'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 KCG shares: Looking at the chart above, KCG's low point in its 52 week range is $9.75 per share, with $13.75 as the 52 week high point — that compares with a last trade of $10.96. According to the ETF Finder at ETF Channel, KCG makes up 1.56% of the iShares U.S. Broker-Dealers & Securities Exchanges ETF ( IAI) which is trading up by about 0.3% on the day Thursday.
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
Symantec Is Upgraded to Buy at Mizuho on Attractive Valuation
Mizuho upgrades the stock to buy from neutral, and lifts the stock price to $23 from $22.
RH Charts Lack Staying Power for a Sustained Advance
Investors and traders have not shown a strong and lasting desire to accumulate the retailer's shares
C&J Energy and Keane Group Agree to 'Merger of Equals'
C&J Energy Services and Keane Group announce they have agreed to a 'merger of equals,' creating a diversified oilfield services company with an enterprise value of $1.8 billion
Fed Steps Up to the Plate, Paris Air Show, Trading Airbus: Market Recon
My thesis all along has been that an attempt to normalize the yield curve must be made, therefore I would choose to be proactive.