LLegendary investor Warren Buffett advises to be afraid when others are greedy, and to be greedy when others are afraid. 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 Thursday’s trading, shares of Tencent Music Entertainment Group (ticker: TME) entered oversold territory, hitting an RSI reading of 26.9, after changing hands as low as $4.83 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 43.5. A bullish investor might take TME’s RSI reading of 26.9 today as a sign that the recent selloff is running out of steam and starting to look for entry point opportunities on the buy side. The chart below shows the one-year performance of TME stock:
Looking at the chart above, TME’s low point in its 52-week range is $4.83 per share, with $32.2481 as its 52-week high – compare with a last trade of 4.84 $.
Free report: Top 7%+ Dividends (paid monthly)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.