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 Northwest Pipe Co. ( NWPX - Get Report) entered into oversold territory, hitting an RSI reading of 29.4, after changing hands as low as $16.05 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 58.5. A bullish investor could look at NWPX's 29.4 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 NWPX shares: Looking at the chart above, NWPX's low point in its 52 week range is $8.37 per share, with $19.55 as the 52 week high point — that compares with a last trade of $16.11.
More from Stocks
Apple, Coca-Cola, Snap, Facebook, Debt Ceiling - 5 Things You Must Know
U.S. stock futures rise ahead of earnings reports from a number of corporate heavyweights and after the White House and congressional negotiators reach a budget deal that will lift the government's debt limit; Coca-Cola, Snap, Visa and Harley-Davidson are among the companies reporting earnings on Tuesday; Apple reportedly is in talks to buy Intel's modem chip business for $1 billion.
What to Watch When Snap Reports Its Latest Results
Snap's user trends have stabilized, and its revenue has grown this year. Can it keep up the pace?
Acadia Falls Sharply in After-Hours Trading After Schizophrenia Drug Fails Study
Stock drops as Pimavanserin study finds no statistically significant improvement in adult schizophrenia patients.
A Slow Tape Means Investors Need to Find Other Things to Do
When the tape slows down it's a dangerous time to be trading.