Legendary investor Warren Buffett advises being fearful when others are greedy, and greedy when others are fearful. One way we can try to gauge the level of fear in a particular 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 oversold if the stock’s RSI value drops below 30.
During trading on Friday, shares of Arthur J. Gallagher & Co. (symbol: AJG) entered oversold territory and reached an RSI value of 29.6, after changing hands to a low of $220.36 per share. For comparison, the current RSI value of the S&P 500 ETF (SPY) is 81.0. A bullish investor might view AJG’s RSI reading of 29.6 today as a sign that the recent heavy selling is exhausting itself and look for buy-side entry opportunities. The chart below shows the one-year performance of AJG shares:
![Arthur J. Gallagher & Co. 1-year performance chart](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png)
Looking at the chart above, AJG’s 52-week low is $174.445 per share, with $254.001 as its 52-week high – comparable to a last trade of $222.86.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.