Digital real estate giant Zillow entered into oversold status this week as its shares fell amid broader indications that the U.S. housing market was slowing down.
An “oversold” stock is one that is trading below its estimated value. Investors use what is called a “relative strength index” to analyze the magnitude of recent price changes and determine if a stock has dipped below its intrinsic worth.
Zillow’s share prices have been roughly declining since mid-February and this month dipped below 100 for the first time since November.
“A bullish investor could look at ZG’s 28.0 RSI 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,” NASDAQ noted in its analysis.