Investors are always looking for any way possible to gain an advantage on the market.
This is usually accomplished by looking at the economic metrics of certain stocks before buying them. One popular metric is the Relative Strength Indicator – or RSI.
Though it’s been around for decades, the RSI sometimes gains less attention than other stock measurement tools like valuations, balance sheets, and price-to-earnings ratios.
But RSI can be a very effective way to measure a stock’s potential. Low RSI stocks are particularly interesting to investors and can offer great returns.
What Is RSI?
Before we look at stocks with low RSI, it’s probably a good idea to define exactly what RSI is.
The RSI was developed by J. Welles Wilder in 1978. The tool measures the speed and change of price movements, oscillating between zero and 100.
Traditionally, the RSI is considered overbought when it’s above 70 and oversold when it’s below 30. When a stock is oversold it could suggest that a security is primed for a corrective price pullback. An oversold stock could be undervalued and could indicate a rebound in the near-term.
When demand recedes for a stock, it could be because of bad news about the underlying company or represent negative trends in the market that have had an adverse impact on the company. But if a stock declines in value without an obvious reason, the RSI can serve as a great tool for finding a stock that is oversold and thus a good buying opportunity. Finding the right time to buy a declining stock is usually helped by a solid understanding of RSI technical analysis.
With that out of the way, let’s look at a few Low RSI stocks. Each of these stocks currently has an RSI below 20.
1. Cineplex (CGX-T)
This Canadian movie theater operator has been hit hard by the Coronavirus pandemic. As a result, its stock has fallen sharply.
But that may not be bad news for new investors, with the stock falling into oversold territory according to its RSI.
Shares of CGX recently hit a new 52-week low of $4.52, and as parts of Canada return to Covid-related lockdown measures, movie theaters will not be allowed to open. This could mean the stock is a dangerous investment for buyers, even at this low of a price. However, if and when things begin to reopen, we could see a rebound in the stock price.
At any rate, this is the type of opportunity for investors who are comfortable with the risk.
2. SITI Networks (SITI)
SITI was founded in 2006 in Noida India. SITI Networks is a holding company that works in the cable television network services and allied services spaces. The company offers digital television, broadband, and HighDefinition services.
Currently, SITI’s RSI is sitting at 17.53. The amount of debt the company is currently holding could be a deterrent to investors with a lower risk profile. After all, if SITI’s debtors come calling, the company would need to recapitalize in order to repay.
But, if you’re looking for a stock with a low RSI, this might be a good bet for you.
3. ShiftPixy (PIXY)
ShiftPixy is a gig economy platform that helps users find shift work when they’re looking for extra work. The company is based in Irvine, California.
The company’s stock has seen some turbulence in recent weeks, but it’s RSI is well-situated within oversold territory, indicating it could see a rebound in the near-term.
Earlier this year, shares of PIXY more than doubled in active trading after the company announced completion of a recapitalization and the closing of a contract assignment. Most of ShiftPixy’s contracted book of business was assigned for $20 million, with the proceeds expected to fund operations through to cash-flow breakeven.
Still, the stock has had more ups and downs in recent months, which could indicate a lack of underlying fundementals. But investors have been pro this stock in the past, and with an RSI of 22.28, there could be a rebound in the future.
Looking at RSI can be a good indicator that a stock is headed for a rebound. It may be worth your time to check out an RSI screener or an RSI scanner.
An RSI stock scanner can help you quickly determine which stocks are trading in oversold territory. If you’re looking at where to find RSI for stocks, these can be an indispensable tool. Indeed, there are plenty of free rsi stock screeners available online.
Use a list like this as a jumping off point before you start doing your own research. RSI levels can chance quickly, so always make sure you do your own investigating before putting down your hard earned money on a low RSI stock.
But if you keep an eye on RSI, through things like a relative strength stock screener, it can be a great way to gain an advantage on the market.