Warren Buffett’s timeless advice echoes in the world of trading: be fearful when others are greedy, and be greedy when others are fearful. One method to gauge the level of fear in a stock is through the Relative Strength Index (RSI), a momentum indicator ranging from 0 to 100. When the RSI falls below 30, it signals an oversold condition.
On Friday, Galapagos NV (Symbol: GLPG) ventured into oversold territory, registering an RSI of 29.5, as its shares dipped to $35.72 each. In contrast, the S&P 500 ETF (SPY) currently holds an RSI of 68.4. An optimistic investor may interpret GLPG’s RSI of 29.5 as a hint that the recent intense selling pressure is near a halt, signaling potential entry points for buyers. The chart below illustrates the one-year journey of GLPG shares:
Inspecting the chart, GLPG’s 52-week low stands at $31.86 per share, while the high is $45.21 — in comparison, the most recent trade was at $35.84.
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The opinions expressed here belong to the author and may not align with those of Nasdaq, Inc.
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