LLegendary investor Warren Buffett advises to be afraid when others are greedy, and to be greedy when others are fearful. One way to try to gauge the fear level of a given stock is to use a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered as oversold if the RSI reading falls below 30.
In Tuesday’s trading, shares of Northern Trust Corp (ticker: NTRS) entered oversold territory, hitting an RSI reading of 29.98, after changing hands as low as $92.555 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 31.4. A bullish investor might take today’s RSI of 29.98 from NTRS as a sign that the recent sell-off is running out and starting to look for entry point opportunities on the buy side. The chart below shows the one-year performance of NTRS stocks:
Looking at the chart above, NTRS’ low point in its 52-week range is $92.555 per share, with $135.15 as its 52-week high – compare with a last trade of $93.60.
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