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 Royal Bank of Scotland Group plc ( RBS) entered into oversold territory, hitting an RSI reading of 29.2, after changing hands as low as $7.365 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 48.9. A bullish investor could look at RBS's 29.2 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 RBS shares: Looking at the chart above, RBS's low point in its 52 week range is $5.66 per share, with $8.74 as the 52 week high point — that compares with a last trade of $7.36.
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
Stocks Higher as Wall Street Tries Putting Aside Trade War Worries
Stocks trade higher Friday as Wall Street heads into a long Memorial Day weekend.
Add Foot Locker to the Latest List of Retail Casualties
There's little in the report or technical picture that makes me want to rush into FL.
HPE's CFO Discusses Impact of Cloud Trends and Lower Memory Prices
During a talk with TheStreet right after its earnings report, CFO Tarek Robbiati talks about how HPE is trying to position itself as cloud infrastructure adoption continues, and what kind of boost it's getting from lower memory prices.
Boeing Could Face SEC Probe Into 737 MAX Groundings - Report
The SEC is examining whether the company was forthcoming to shareholders about problems with the 737 MAX jet.