LLegendary investor Warren Buffett advises to be fearful when others are greedy and to be greedy when others are afraid. One way we can try to measure the level of fear of a given stock is by using a technical analysis indicator called a Relative Strength Index, or RSI, which measures momentum on a scale from zero to 100. A stock is considered oversold if the RSI reading falls below 30.
During Friday’s trading, shares of Instructure Holdings Inc (ticker: INST) entered oversold territory, hitting an RSI of 28.5, after changing hands as low as $ 20.03 per share. In comparison, the current RSI reading of the S&P 500 ETF (SPY) is 41.3. A bullish investor might take the 28.5 RSI INST reading today as a sign that the recent sell-off is running out and start looking for entry point opportunities on the long side. The graph below shows the performance over one year of the INST share:
Looking at the chart above, the low point of the INST in its 52 week range is $ 18.52 per share, with $ 29.59 as a 52 week high, compared with a last trade of 20. , $ 48.
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