The information technology sector is currently facing a challenging period, with several prominent companies trading at oversold levels. This market downturn presents a unique opportunity for investors to acquire shares of potentially undervalued companies. One popular way to identify such opportunities is by analyzing the Relative Strength Index (RSI), a momentum indicator that compares a stock’s strength on days when prices rise to its strength on days when prices fall. When compared to a stock’s price action, the RSI can provide traders with a better understanding of how a stock might perform in the short term. Generally, an asset is considered oversold when the RSI falls below 30.
Here’s a closer look at three major players in the technology sector currently experiencing oversold conditions, with RSI values near or below 30:
Qorvo Inc (QRVO)
On October 29, Qorvo reported strong quarterly earnings of $1.88 per share, exceeding analyst expectations of $1.85. Quarterly revenue also surpassed estimates, reaching $1.047 billion compared to the anticipated $1.028 billion. However, this represents a decrease from the $1.104 billion in sales recorded during the same period last year. Despite the positive earnings, Qorvo’s stock has experienced a decline of approximately 27% over the past month, reaching a 52-week low of $70.38. Currently, the company’s RSI value stands at 19.69, indicating a significantly oversold condition. Interestingly, shares of Qorvo gained 1.5% to close at $72.86 on Wednesday.
ASML Holding NV (ASML)
ASML Holding, a leading provider of semiconductor manufacturing equipment, is facing growing pressure from the United States to tighten restrictions on semiconductor technology sales to China. This potential policy shift has led to a decline in the company’s stock price, which has fallen approximately 19% over the past month, reaching a 52-week low of $633.80. ASML’s RSI value currently sits at 29.43, suggesting an oversold market condition. Shares of ASML closed at $661.43 on Wednesday, experiencing a 2.2% drop.
Super Micro Computer Inc (SMCI)
Super Micro Computer, a leading provider of high-performance computing and storage solutions, recently provided a business update for the first quarter, reporting preliminary results. The company expects to report first-quarter revenue between $5.9 billion and $6 billion, a significant decrease from its previous guidance range of $6 billion to $7 billion. This disappointing outlook has resulted in a substantial decline in Super Micro’s stock price, falling around 52% over the past month and hitting a 52-week low of $20.20. Currently, SMCI’s RSI value stands at 19.79, highlighting an oversold market condition. On Wednesday, shares of Super Micro Computer closed at $22.70, down by 18.1%.
These three companies, all operating in the technology sector, exhibit classic signs of oversold conditions, with RSI values below 30. This presents a compelling opportunity for investors seeking to acquire shares of potentially undervalued companies. However, it’s crucial to conduct thorough due diligence and consider individual investment goals and risk tolerance before making any investment decisions.
