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 Walter Investment Management Corp ( WAC) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $7.13 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 57.1. A bullish investor could look at WAC's 29.8 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 WAC shares: Looking at the chart above, WAC's low point in its 52 week range is $7.13 per share, with $23.70 as the 52 week high point — that compares with a last trade of $7.55.
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
What's the Difference Between an IPO and a Direct Listing?
Do you know what the difference is between an IPO and a direct listing? TheStreet breaks it down for you in 60 seconds.
Dow Futures Suggest Fresh 2019 Highs as Fed Rate Signal Boost Global Stocks
U.S. equity futures extended gains Thursday, pulling stock benchmarks higher all over the world, as investors reacted to signals of lower interest rates from the U.S. Federal Reserve and the prospect of a breakthrough in U.S.-China trade talks.
Federal Reserve, Oracle, Slack, Deutsche Bank, Waymo - 5 Things You Must Know
U.S. stock futures rise sharply and global stocks charge higher amid signals of lower interest rates from the Federal Reserve; Oracle tops fourth-quarter earnings and revenue expectations and says first-quarter profit likely will beat forecasts; Slack's direct public offering is Thursday.
Deutsche Bank Slumps Following NYT Report of U.S. Money Laundering Probe
Deutsche Bank shares traded lower in Frankfurt following a report from The New York Times that suggests the troubled German lender is facing a U.S. money laundering probe.