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 Pure Cycle Corp. ( PCYO - Get Report) entered into oversold territory, hitting an RSI reading of 28.5, after changing hands as low as $7.95 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 34.8. A bullish investor could look at PCYO's 28.5 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 PCYO shares: Looking at the chart above, PCYO's low point in its 52 week range is $5.10 per share, with $8.95 as the 52 week high point — that compares with a last trade of $7.95.
More from Stocks
Traders Wary of Chasing Pricey Names as Rotation Resumes
As earnings such as those by Netflix and IBM land, investors are again shying away from momentum stocks and moving into value names.
Market Wrap: GM Reaches Tentative Agreement With UAW
GM shares are rising after hours after also climbing in intraday trading.
Netflix Shares Pop as Q3 Earnings, Subscriber Adds Beat Estimates
Netflix's third quarter was strong, but the fourth quarter is currently looking to be weaker than analysts expected.
Stocks End Down as Trade War Fears, Weak Retail Sales Overshadow Strong Earnings
Stocks finish down as investors divide their attention between strong third-quarter earnings and concerns over weak U.S. retail sales and the ongoing U.S.-China trade war.