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 Wednesday’s trading, shares of Beam Therapeutics Inc (ticker: BEAM) entered oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $29.54 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 30.7. A bullish investor might view BEAM’s RSI of 29.8 today as a sign that the recent strong selloffs are running out and starting to look for entry point opportunities on the buy side. The graph below shows the one-year performance of BEAM shares:
Looking at the chart above, BEAM’s low point in its 52-week range is $29.54 per share, with $138.5219 as its 52-week high – compare with a last trade of 29.96 $.
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