TheForeign investor Warren Buffett advises to be greedy when others are greedy, and to be greedy when others are afraid. One way we can try to gauge the level of fear in a particular stock is with a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale from zero to 100. A stock is considered oversold if the RSI reading drops below from 30.
In trading on Tuesday, shares of Park Hotels & Resorts Inc (Symbol: PK) entered the oversold territory, with the RSI at 29.5, after trading as low as $16.73 per share. By comparison, the current RSI reading for the S&P 500 ETF (SPY) is 45.5. A bullish investor can look at today’s PK RSI reading of 29.5 as a sign that the recent heavy selling is in the process of exhausting itself, and begins looking for entry point opportunities on the buy side. The chart below shows the one year performance of PK stocks:
Looking at the chart above, the lowest point for PK in the 52-week range is $15.925 per share, with $24.67 as the highest point in the 52-week range – compared to the last trade of $16.64.
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