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
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The thoughts and perspectives voiced herein belong to the author alone and may not necessarily mirror those of Nasdaq, Inc.
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