Fresenius Medical Care (FMS) Drops Into Technically Oversold Zone

Warren Buffett famously advised investors to be fearful when others are greedy and greedy when others are fearful. One useful method for gauging the level of fear surrounding a particular stock is the Relative Strength Index (RSI), a momentum indicator measured on a scale from zero to 100. Generally, a stock is regarded as oversold when its RSI dips below 30.

On Friday, shares of Fresenius Medical Care (Symbol: FMS) entered oversold territory, printing an RSI reading of 29.7 and trading as low as $23.83. For context, the S&P 500 ETF (SPY) currently has an RSI of 55.4. Bullish investors may interpret FMS’s 29.7 RSI as a signal that recent selling pressure is beginning to fade, potentially setting the stage for a rebound and presenting an opportunity to initiate positions on the long side. The chart below illustrates FMS’s performance over the past year:

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As shown, the stock’s 52-week low stands at $23.29 per share, while its 52-week high is $42.13. Its most recent trade was recorded at $24.07.

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