THELegendary investor Warren Buffett advises to be fearful when others are greedy and to be greedy when others are afraid. One way to try to measure the fear level of a given action is to use a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. An action is considered oversold if the RSI reading falls below 30.
Shares of Shenandoah Telecommunications Co (ticker: SHEN) entered oversold territory on Wednesday, hitting an RSI of 27.0, after changing hands as low as $ 28.36 per share. In comparison, the current RSI reading of the S&P 500 ETF (SPY) is 65.2. A bullish investor might take SHEN’s 27.0 RSI today as a sign that recent massive selling is running out, and start looking for entry point opportunities on the long side. The chart below shows the one-year performance of SHEN shares:
Looking at the chart above, SHEN’s low point in its 52 week range is $ 28.25 per share, with $ 61.53 as a 52 week high, compared with a last trade of 28.37. $.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.