A steep decline of -17.31% has plagued Braze, Inc. (NASDAQ: BRZE) in the last four weeks, with persistent selling pressure. Despite this, signs of a possible trend reversal are emerging, as the stock now finds itself in oversold territory. Wall Street analysts are increasingly optimistic about the company’s upcoming earnings report, suggesting a potential turnaround may be on the horizon.
Determining Oversold Stocks through RSI
When assessing whether a stock is oversold, the Relative Strength Index (RSI) is a valuable tool. This momentum oscillator gauges the speed and direction of price movements.
RSI ranges from 0 to 100, with readings below 30 typically indicating an oversold condition.
All stocks experience fluctuations between overbought and oversold conditions, independent of their underlying fundamentals. RSI provides a quick and efficient method to evaluate if a stock’s price is poised for a reversal.
While RSI is helpful, it should not be the sole basis for investment decisions.
Potential Rebound for BRZE
With an RSI reading of 29.27, BRZE shows signs of selling pressure potentially exhausting itself, hinting at a forthcoming rebound as supply and demand seek equilibrium.
Besides RSI, fundamental factors also support a turnaround. Sell-side analysts have significantly raised earnings estimates for BRZE in the current year, with a consensus EPS estimate increase of 12.9% over the last 30 days. Upward earnings revisions typically drive price appreciation in the short term.
Furthermore, BRZE holds a Zacks Rank #2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings trends and surprises. This ranking is a strong indicator of the stock’s potential reversal in the near future.
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