Warren Buffett’s Wisdom: Assessing Fear in Stocks with RSI
Legendary investor Warren Buffett advises being cautious when others are optimistic and vice versa. One method to gauge investor sentiment is through the Relative Strength Index (RSI), a technical tool that measures stock momentum on a scale from zero to 100. A stock is labeled as oversold when its RSI drops below 30.
On Friday, shares of Liberty Global Ltd (Symbol: LBTYA) fell into oversold territory, registering an RSI of 29.9, with the stock trading as low as $13.20 per share. In contrast, the current RSI for the S&P 500 ETF (SPY) is 67.5. This low RSI of 29.9 might prompt bullish investors to see the heavy recent selling as likely nearing its end, signaling a potential buying opportunity. The chart below illustrates the one-year performance of LBTYA shares:
The chart reveals that LBTYA’s 52-week low stands at $8.2359 per share, while the high reached $14.295. The last recorded trading price was $13.39.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
