Warren Buffett’s Wisdom: Is Bright Horizons a Buying Opportunity?
Legendary investor Warren Buffett famously advises to be fearful when others are greedy, and to be greedy when others are fearful. A useful way to gauge fear in a stock is through the Relative Strength Index (RSI), a technical analysis tool that measures momentum on a scale of zero to 100. A stock is considered oversold if its RSI reading is below 30.
On Friday trading, shares of Bright Horizons Family Solutions, Inc (Symbol: BFAM) reached oversold levels, with an RSI of 29.6. The stock traded as low as $131.05 per share during the day. In contrast, the current RSI for the S&P 500 ETF (SPY) stands at 67.8. For bullish investors, BFAM’s 29.6 RSI might signal that the heavy selling is nearing its end, creating potential buying opportunities.
The chart below displays BFAM’s performance over the past year:
Examining the chart, BFAM’s 52-week low is $71.65 per share and its high is $141.90. Currently, the last trade was at $131.68.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
