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 CapStar Financial Holdings Inc ( CSTR - Get Report) entered into oversold territory, hitting an RSI reading of 28.3, after changing hands as low as $19.52 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 83.7. A bullish investor could look at CSTR's 28.3 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 CSTR shares: Looking at the chart above, CSTR's low point in its 52 week range is $16 per share, with $22.22 as the 52 week high point — that compares with a last trade of $19.49.
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
When to Buy Apple Stock After Tariff Worries Drive Losses
Apple stock is down about 15% from its highs earlier this month. When will the buyers step up?
Chart of the Day: Sizing Up the Huawei Hit to Semiconductor Stocks
Not all semiconductor stocks are poised to experience the same headwind from Huawei.
Some Patterns on Nordstrom Show Promise but This Is Not a Base Yet
Let's check out the charts and indicators ahead of Tuesday's earnings.