In the wise words of legendary investor Warren Buffett, it is often prudent to be greedy when others are fearful. One effective method to gauge the fear factor surrounding a stock is through the Relative Strength Index (RSI), a technical analysis indicator that measures momentum on a scale of zero to 100. A stock is deemed oversold if its RSI reading drops below 30.
On Tuesday, shares of Dynatrace Inc (Symbol: DT) crossed into oversold territory, registering an RSI reading of 28.4, with prices dipping as low as $44.92 per share. For comparison, the current RSI reading of the S&P 500 ETF (SPY) stands at a more robust 57.2. A bullish investor might interpret DT’s RSI of 28.4 today as a signal that the recent intense selling pressure is nearing its end, prompting them to scout for potential entry points on the buying side. The chart below illustrates the one-year performance of DT shares:
Analyzing the chart above, we observe that DT’s 52-week low rests at $40.27 per share, with $61.41 representing the high point — a stark contrast to the most recent trade at $45.23.
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The sentiments and perspectives articulated within this piece are reflective of the author’s viewpoints and do not necessarily mirror those of Nasdaq, Inc.
