In trading on Thursday, shares of Agnico Eagle Mines Ltd (Symbol: AEM) entered into oversold territory, changing hands as low as $47.60 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Agnico Eagle Mines Ltd, the RSI reading has hit 29.1 — by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 50.0, the RSI of Spot Gold is at 8.1, and the RSI of Spot Silver is presently 11.3. A bullish investor could look at AEM's 29.1 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), AEM's low point in its 52 week range is $36.685 per share, with $67.14 as the 52 week high point — that compares with a last trade of $48.04. Agnico Eagle Mines Ltd shares are currently trading down about 2.3% on the day.
Also see: Monthly Dividend Paying REITs
Top Ten Hedge Funds Holding DJPY
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.