Legendary investor Warren Buffett’s advice to be fearful when others are greedy and greedy when others are fearful is a timeless maxim in the world of investing. One way to gauge the level of fear in a stock is through the Relative Strength Index (RSI), which measures momentum on a scale of zero to 100. A stock is considered oversold if the RSI reading falls below 30.
On Monday, shares of Autodesk reached oversold territory with an RSI reading of 28.8, trading as low as $228.91 per share. This is compared to the S&P 500 ETF’s RSI reading of 39.6. Investors may view this low RSI reading as a sign that heavy selling is subsiding, potentially signaling a buying opportunity.
The chart shows Autodesk’s range over the past year, with a low of $188.38 and a high of $279.53 per share. The current trading price is $229.62. This information, coupled with the oversold RSI reading, could prompt investors to consider entering the market at a potentially advantageous price point.
In addition to Autodesk, there are nine other oversold stocks worth investigating for potential investment opportunities. By monitoring RSI readings and understanding market trends, investors can identify when stocks may be undervalued and positioned for a rebound. This strategy aligns with Buffett’s advice to capitalize on fear in the market.
Investors can also explore training their brains to become more proficient at predicting stock chart movements. By developing an understanding of technical indicators like the RSI and honing their analytical skills, individuals can enhance their ability to make informed investment decisions and navigate the complexities of the stock market.