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 Wednesday, shares of Ultra Clean Holdings Inc ( UCTT - Get Report) entered into oversold territory, hitting an RSI reading of 29.4, after changing hands as low as $21.62 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 71.8. A bullish investor could look at UCTT'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 UCTT shares: Looking at the chart above, UCTT's low point in its 52 week range is $9.25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $22.09. According to the ETF Finder at ETF Channel, UCTT makes up 2.37% of the PowerShares Dynamic Semiconductors Portfolio ETF ( PSI) which is trading lower by about 5.1% on the day Wednesday.
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
FedEx Tops Fiscal Fourth-Quarter Earnings Estimates
Delivery giant says macroeconomic weakness and trade uncertainty will weigh on FedEx Express business in fiscal 2020.
What Are Blue Chip Stocks and Why Should You Invest in Them?
Blue Chip stocks have a large capitalization, a history of growth and stability, and frequently pay dividends. But what exactly are they, and should you invest in them?
Chipotle Initiated Outperform at Credit Suisse With $870 Price Target
Credit Suisse initiated coverage of Chipotle Mexican Grill with an outperform recommendation and price target of $870. The stock gained more than $10.