RSI alert: Mercury (MRCY) systems are now oversold

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 Mercury Systems Inc (Symbol: MRCY) entered oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $58.30 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 49.5. A bullish investor might take the MRCY’s RSI of 29.8 today as a sign that the recent selloff is running out of steam, and start looking for entry point opportunities on the buying side. The chart below shows the one-year performance of the MRCY stock:

Looking at the chart above, MRCY’s low point in its 52-week range is $44.44 per share, with $78.24 as its 52-week high – compare with a last trade of 58.54 $.

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