Warren Buffett’s Wisdom: Understanding Oversold Stocks Like Canadian Pacific Kansas City
Investor Warren Buffett often reminds us to be cautious when others are eager and to open our wallets when fear dominates. A useful tool to gauge the level of fear in individual stocks is the Relative Strength Index (RSI). This technical analysis indicator assesses momentum on a scale of 0 to 100, where a reading below 30 indicates that a stock is oversold.
On Friday, shares of Canadian Pacific Kansas City Ltd (Symbol: CP) entered oversold territory with an RSI reading of 28.2, having traded as low as $77.215 per share. In contrast, the S&P 500 ETF (SPY) is currently at an RSI of 61.3. A bullish investor may view CP’s 28.2 RSI as a potential signal that intense selling may be slowing down, suggesting opportunities to buy. The chart below illustrates the one-year performance of CP shares:
For context, CP’s 52-week range shows a low of $69.075 per share and a high of $91.58 – a notable comparison to its recent trade price of $77.11.
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Additional Insights:
- Institutional Holders of ZAPP
- UDHI Insider Buying
- Funds Holding MBOX
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
