Legendary investor Warren Buffett often reminds us that it’s wise to be fearful when others are greedy and vice versa. A useful tool investors use to gauge fear in the stock market is the Relative Strength Index (RSI). This technical analysis indicator assesses momentum on a scale from zero to 100, flagging a stock as oversold when its RSI drops below 30.
In trading on Thursday, Amedisys, Inc. (Symbol: AMED) registered an RSI of 29.4, indicating it is in oversold territory. During the trading session, shares fell to as low as $94.76 each. In contrast, the current RSI for the S&P 500 ETF (SPY) stands at 44.0. Investors who have a bullish outlook may view AMED’s RSI drop as a potential opportunity, suggesting that the extensive selling could be reaching its limit and paving the way for buying prospects. Below is a chart showcasing the one-year performance of AMED shares:
Examining the chart, Amedisys has recorded a 52-week low of $89.55 per share, while its peak reached $98.95. Currently, the last trade was at $94.60.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
