Warren Buffett, the legendary investor, famously states that people should be cautious when others are eager and daring when others are scared. One method for assessing fear levels in stocks is through the Relative Strength Index (RSI), a technical analysis tool that gauges momentum on a scale of zero to 100. A stock is deemed oversold when its RSI falls below 30.
On Wednesday, shares of XP Inc – Class A (Symbol: XP) reached an RSI of 29.5, indicating it is in oversold conditions after trading as low as $14.87 per share. For comparison, the RSI of the S&P 500 ETF (SPY) stands at 60.2. This low RSI value for XP may suggest that the heavy selling could soon exhaust. Consequently, bullish investors might start searching for buying opportunities. Below is a chart depicting XP’s performance over the past year:
Examining the chart, XP’s lowest point in its 52-week range is $14.87, while the highest point is $27.025, with the latest trade at $14.94.
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Additional Information:
- Institutional Holders of MDCI
- AEMD Market Cap History
- STJ Options Chain
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
