Warren Buffett famously advises investors to be fearful when others are greedy, while suggesting they be greedy when fear takes over the market. One effective way to assess the level of fear in a stock is through the Relative Strength Index (RSI), a technical analysis tool that measures momentum on a scale from 0 to 100. Stocks are deemed oversold when their RSI falls below 30.
On Friday, Colgate-Palmolive Co. (Symbol: CL) saw its shares reach an RSI of 29.6, indicating an oversold condition, as prices dipped to as low as $95.37 per share. In contrast, the S&P 500 ETF (SPY) stood at a more robust RSI of 61.3. For bullish investors, CL’s lower RSI may suggest that recent selling pressures could be losing steam, prompting a search for potential buying opportunities. The following chart presents the one-year performance of CL shares:
Reviewing the chart, the lowest point for CL in the past 52 weeks is $71.465 per share, while its highest peak reached $109.30. Currently, shares are trading around $95.61.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
