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 Friday, shares of Lumber Liquidators Holdings Inc ( LL - Get Report) entered into oversold territory, hitting an RSI reading of 29.98, after changing hands as low as $11.29 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 43.3. A bullish investor could look at LL's 29.98 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 LL shares: Looking at the chart above, LL's low point in its 52 week range is $10.01 per share, with $26.96 as the 52 week high point — that compares with a last trade of $11.34.
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
Charles Schwab Shares Pop on Second-Quarter Earnings and Revenue Beat
Clients opened almost 400,000 accounts in Q2, bringing the total at the firm to 12 million.
Complacent Market Players Keep It Chill -- as Sparks Fly All 'Round
It is still a surprisingly sedate market, despite indexes sitting close to all-time highs, earnings season, possible interest-rate cuts and endless speculation about China trade.
Domino's Drops as Second-Quarter Revenues Miss Estimates
The world's top pizza chain earned $2.19 per share in the quarter versus expectations for $1.78. But total sales came in short of expectations.
Dow Ends Lower; Stocks Slip as Trump Fans China Trade Worries
The Dow ends down after reaching an intraday day Tuesday as President Trump says the U.S. and China have `a long way to go' before reaching a trade agreement.