Redwood Trust Enters Oversold Territory (RWT)By Dividend Channel Staff, Wednesday, February 7, 12:00 PM ETLegendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through 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 to be oversold if the RSI reading falls below 30. In trading on Wednesday, shares of Redwood Trust Inc (NYSE:RWT) entered into oversold territory, hitting an RSI reading of 29.2, after changing hands as low as $6.38 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 69.7. A bullish investor could look at RWT's 29.2 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of RWT shares:
Looking at the chart above, RWT's low point in its 52 week range is $5.47 per share, with $8.41 as the 52 week high point — that compares with a last trade of $6.39. Find out what 9 other oversold stocks you need to know about »
Special Offer: Join the income investing conversation on ValueForum.com with a special Seven Days for Seven Dollars invitation.
This Article's Word Cloud:
About
Buffett
Days
Dollars
Find
Index
Join
Know
Legendary
Looking
NYSE
Offer
Oversold
Redwood
Relative
Seven
Should
Special
Start
Stocks
Strength
Trust
ValueForum
Warren
Wednesday
about
above
advises
after
analysis
begin
below
bullish
chart
fearful
greedy
investor
look
others
oversold
point
raquo
reading
share
shares
stock
that
week
when
with
|