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Traders can benefit from applying Relative Strength Index
(RSI) signals in prevailing market conditions. One approach to consider which
oversold stocks to buy is to wait for the RSI to cross back above 30% before considering an entry. Additionally, initiating a more minor initial position and incrementally increasing exposure could mitigate risk.
With their RSI indicating deeply oversold levels, these stocks to buy may be primed for a rebound. This could mean not only potentially fast gains from a correction higher, but also until momentum shifts to overbought conditions. So, keep an eye out for these oversold stocks to buy and remember that timing is everything.
Air Products (APD)
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Air Products (NYSE: APD) is the first of the oversold stocks to buy. Its share price declined significantly into negative territory following disappointing earnings as it reached a 52-week low. Investors were displeased by poor performance in China, which contributed to missing the bottom line by 6.6% and necessitated a reduction in forecasts.
The shares currently trade with a RSI of just 2.4 and a price-to-earnings ratio of 21.3. This is below the average for the S&P 500, which stands at 27.
APD recently increased its dividend for the 42nd consecutive time, and revenue guidance still implies that the company anticipates growth. Analysts appear optimistic, with none recommending a “Sell” and providing an average target price of $270 per share.
Endeavour Silver (EXK)
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Endeavour Silver’s (NYSE: EXK) share price has declined in line with small-cap stocks despite the weaker dollar having little positive impact on silver prices. This has left the stock significantly oversold with an RSI of 5.15, in contrast to its sound financial performance. As a result, it makes a good candidate as an oversold stock to buy.
Management recently provided an update on progress at the Terronera project, which is expected to commence commercial operations by the end of the year. The project is expected to produce up to 69.7 million ounces of silver equivalent over its lifetime.
Analyst coverage remains notably more optimistic than current market levels. All recommend either a “Hold” or a “Buy” on the stock. Consensus target price represents a 290% increase potential from current prices, averaging $5.83.
Waters Corp (WAT)
Waters Corp’s Earnings Beat Expectations, China Results Spook Investors
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Earnings Surpass Expectations
Waters Corp (NYSE:WAT) has surpassed earnings expectations both on the top and bottom lines. This should have spurred celebratory cheers in the investment arena.
However, the Chinese market has sent shockwaves through the investment community. The country’s results seem to have left investors restless and concerned. Alas, even Waters Corp’s larger rival, Thermo Fisher (NYSE:TMO), issued a rather dour warning, indicating that the demand is unlikely to stage a recovery this year. The company is anticipating only moderate growth in sales revenue at best.
Market Fallout
Unsurprisingly, the stock price of WAT took a tumble in the days following the earnings revelation, resulting in a concerning RSI score of 5.2. The situation seemed grim, and investors had every right to be slightly alarmed.
Thankfully, all was not lost. Analysts are beginning to adopt a more optimistic stance. The tide is turning, with five analysts adjusting their recommendation from “Hold” in January to a resounding “Strong Buy” in February. The average target price now stands at $325, marking a modest improvement compared to the current stock value. A silver lining was indeed visible amidst the cloud of apprehension.
Industry Insights
It’s worth noting that even in the volatile world of investments, there are silver linings piercing through the apparently stormy clouds. We cannot overlook the fact that persistence and confidence on the part of both companies can lead to the resurrection of faith in their stocks from investors who have weathered quite a tempest.
On the date of publication, Stavros Tousios did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
