In the world of investments, sage counsel from legendary financier Warren Buffett is often reiterated: be apprehensive when the crowd is exuberant, and be voracious when the masses are anxious. One can gauge the prevailing sentiment in a stock by employing technical tools like the Relative Strength Index (RSI), a metric that gauges momentum on a 0 to 100 scale. When the RSI value falls below 30, a stock is deemed oversold.
During the recent trading session, Amgen Inc (Symbol: AMGN) found itself in oversold territory, registering an RSI of 29.6, after plummeting to $269.66 per share. To put this in perspective, the RSI for the S&P 500 ETF (SPY) currently stands at 54.9. An optimistic investor may interpret AMGN’s RSI of 29.6 as a signal that the intense selling pressure may be tapering off, presenting potential buying opportunities on the horizon. The visual representation below illustrates AMGN’s performance over the past year:
Taking a closer look at the chart, the lower end of AMGN’s 52-week spectrum sits at $211.71 per share, while the upper threshold lingers at $329.72 — in stark contrast to the recent closing trade value of $268.87.
Discover more about 9 other oversold stocks that demand your attention »
Further Reading:
OPTN Average Annual Return
Top Ten Hedge Funds Holding RRM
CSX Videos
The thoughts and perspectives voiced herein belong to the author alone and may not necessarily mirror those of Nasdaq, Inc.
