Warren Buffett’s Strategy: Analyzing Mercury Systems’ Oversold Status
Understanding Market Fear Through the Relative Strength Index
Legendary investor Warren Buffett once said we should be fearful when others are greedy and greedy when others are fearful. One popular way to gauge fear in stocks is through the Relative Strength Index (RSI), a technical analysis tool that ranges from zero to 100. An RSI below 30 suggests that a stock is oversold.
On Thursday, shares of Mercury Systems Inc (Symbol: MRCY) entered oversold territory, recording an RSI of 27.6 after dipping to $32.42 per share. For comparison, the current RSI for the S&P 500 ETF (SPY) stands at 44.0. A bullish investor might interpret MRCY’s low RSI as a signal that heavy selling is subsiding, indicating a potential buying opportunity. Below is the one-year performance chart for MRCY:
Examining the chart, MRCY’s 52-week low is $25.31, while its high reached $42.72. The most recent trade occurred at $32.35.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
