10 Stocks with RSI Below 30: Stock Overviews, Factors, Features & Risks

In stock analysis, the Relative Strength Indicator (RSI) is a widely used technical tool that measures the momentum and speed of stock price movements. When a stock’s RSI falls below 30, it indicates that the stock may be oversold and could be poised for a rebound. This situation might present an opportunity for investors to purchase the stock at a lower price. Let’s explore stocks with an RSI below 30 and understand what this means for investors.

Stocks with RSI Below 30 in NIFTY

Here is a list of the top 10 stocks with RSI 14-D below 30:

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

• Stock Universe: NIFTY 500
• RSI – 14D: Set the higher limit to 30 – Sort from lowest to highest

Note: The data on the list of stocks with RSI below 30 is from 24th July 2024. This data is derived from Tickertape Stock Screener.

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

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Overview of the Stocks with RSI Below 30

Here are brief overviews of the RSI below 30 NIFTY 500 stocks listed above: 

SKF India Ltd

SKF began its operations in India in 1923 and now offers top automotive and industrial solutions. These solutions are delivered through five key platforms: bearings and units, seals, lubrication, condition monitoring, and maintenance services. Over the last 5 years, the company’s debt-to-equity ratio has been 0.84, lower than the industry average of 32.62, and its current ratio has been 296.5, higher than the industry average of 164.9.

Rainbow Children’s Medicare Ltd

Rainbow Children’s Medicare Limited was initially incorporated as ‘Rainbow Children’s Medicare Private Limited’. The company began as a private company on 7th August 1998, with a Certificate of Incorporation from the Registrar of Companies in Hyderabad, Telangana. The company later transitioned to a public limited company and was renamed ‘Rainbow Children’s Medicare Limited’ on November 20, 2021. Over the last 5 years, the company’s revenue has grown at a yearly rate of 19.34%, higher than the industry average of 10.07% and its market share increased from 1.5% to 2.17%. 

Aditya Birla Capital Ltd

Aditya Birla Capital Limited (ABCL) was previously called Aditya Birla Financial Services Limited. It is a majority-owned subsidiary of Grasim Industries Limited. ABCL operates across various sectors. These include non-banking financial services, asset management, life and health insurance, housing finance, private equity, general insurance broking, wealth management etc. Over the last 5 years, the company’s revenue has grown at a yearly rate of 17.76%, higher than the industry average of 11.09% and its market share increased from 16.22% to 26.47%. 

Adani Enterprises Ltd

Adani Enterprises Limited (AEL) is a flagship company of the Adani Group. It is a rapidly growing, diversified firm. It operates across various sectors, including mining, resource logistics, new energy (with solar module and cell manufacturing), transport (airports and roads), utilities (water and data centres), and food (edible oil and food products). Over the last 5 years, the company’s revenue has grown at a yearly rate of 18.77%, higher than the industry average of 4.43%, and its market share increased from 35.57% to 68.3%. 

RBL Bank Ltd

RBL Bank Limited was originally Ratnakar Bank. The company was established in 1943 in Kolhapur, Maharashtra. It is one of India’s fastest-growing private banks, expanding its presence nationwide. The bank offers a range of services, including wholesale and retail banking, treasury operations, and other financial activities. Over the last 5 years, the company’s current ratio has been 15.99, higher than the industry average of 11.89.

HDFC Bank Ltd

HDFC Bank Limited is a publicly traded banking company offering a variety of banking and financial services. Based in Mumbai, it operates as a modern private-sector bank with a broad range of services. These include commercial and investment banking for businesses and transactional banking for individuals. Over the last 5 years, the company’s revenue has grown at a yearly rate of 26.87%, higher than the industry average of 16.98% and its market share increased from 23.41% to 35.33%. 

Schneider Electric Infrastructure Ltd

Schneider Electric Infrastructure Limited was founded on 12th March 2011 as Smartgrid Automation Distribution and Switchgear Ltd. On 8th December 2011, it changed its name to Schneider Electric Infrastructure Ltd. The company designs, manufactures, and services products for electricity distribution both in India and globally. Its offerings include distribution and medium power transformers, substation automation systems, and ring main units. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.1%, higher than the industry average of 0.15%, and its market share increased from 2.2% to 3.69%. 

Tata Steel Ltd

Tata Steel is a leading global steel producer with an annual crude steel production capacity of 34 million tonnes. The company spans the entire steel manufacturing process, from mining iron ore and coal to producing and distributing finished steel products. Over the last 5 years, the company’s free cash flow growth has been 69.13%, higher than the industry average of -11.52%. As of 24th July 2024, the company’s market capitalisation is Rs. 2,00,123 cr.

ABB India Ltd

ABB India Ltd is a top engineering firm globally. It focuses on helping clients optimise electrical power use and boost industrial productivity. The company has a significant manufacturing footprint in India, with nearly 14 plants. As of 24th July 2024, the largecap company’s market capitalisation is Rs. 1,59,410 cr. The company’s return on equity is 22.82%, its net profit margin is 11.56%, and its cash flow margin is 12.57%. 

Timken India Ltd

The company manufactures, distributes, and sells anti-friction bearings, including tapered roller bearings, other roller bearings, components, and mechanical power transmission products. Timken India operates mainly in anti-friction bearings and mechanical power transmission products. Over the last 5 years, the company’s revenue has grown at a yearly rate of 11.92%, higher than the industry average of 10.44%, and its market share increased from 2.3% to 2.57%.

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How to Invest in Stocks with RSI Below 30?

Here is how an investor may go about investing in oversold stocks or stocks with RSI below 30:

1. Open a demat/trading/brokerage account. Investors can open a demat account with smallcase!

2. Choose the stocks with RSI-14 below 30.

3. Investors can utilise online tools like the Tickertape Stocks Screener to search for stocks with RSI below 30. They can also use the available 200+ filters to analyse these stocks. 

4. Place a ‘Buy’ order on the stocks of your choice. 
Note: Below 30 RSI stocks can often signal oversold conditions and can complement other technical indicators. While it may suggest potential opportunities, evaluating additional technical and fundamental factors is also important before making trading or investment decisions. Combining RSI with other analyses can lead to a more informed choice.

What are Stocks with an RSI Below 30?

These stocks have an RSI 14 level below 30. The RSI, or Relative Strength Index, is a technical indicator that assesses the momentum of a stock’s price movement. An RSI below 30 typically signals that the stock is oversold, which may indicate a potential rebound. For investors and traders, low RSI stocks can present an opportunity to buy these stocks at a discounted price.

Features of Stocks with RSI Below 30

Here are a few key features that stocks with RSI below 30 might exhibit:

• Oversold Conditions: An RSI below 30 suggests that a stock has experienced significant selling pressure, which might indicate it is oversold.
• Potential Price Reversal: Such low RSI levels can signal a possible reversal or bounce-back in stock price as the selling momentum may be slowing down.
• Increased Volatility: Stocks under 30 RSI can often show higher volatility. This can reflect rapid changes in investor sentiment.
• Mean Reversion: These stocks might be candidates for mean reversion strategies, where the price is expected to move back towards its historical average.

Who Should Invest in Stocks with RSI Below 30?

Here are a few types of investors who might find stocks with RSI below 30 interesting:

• Value Investors: Value investors look for undervalued stocks that might rebound. They spot opportunities where the market has overreacted, aiming for gains as the stock recovers. An RSI below 30 can indicate that a stock is oversold, making it an attractive opportunity for these investors.
• Technical Traders: Technical traders rely on analysis to make decisions and find stocks with an RSI below 30 appealing. This indicator signals potential buying opportunities, fitting strategies that exploit momentum shifts. A low RSI suggests a potential upward movement, which aligns with their goal of capitalising on price changes.
• Risk-Tolerant Investors: Investors with a higher risk tolerance, focusing on short to medium-term gains, might benefit from low RSI stocks. They are comfortable with volatility and rapid price changes in pursuit of higher returns. The potential for significant price rebounds in oversold stocks can offer substantial rewards for those willing to take the risk.

Benefits of Investing in Stocks with RSI Below 30

Here are a few potential benefits of investing in stocks with RSI below 30:

• Potential for Price Recovery: RSI below 30 NIFTY 50 stocks are often oversold. When the market corrects, this can lead to sharp price increases, which can offer significant profit opportunities.
• Opportunity for Lower Purchase Prices: Purchasing shares at or near their low RSI levels can allow investors to buy at more attractive prices. This can increase the margin of profit as the stock recovers.
• Indicator of Market Sentiment: An RSI below 30 can indicate that a stock may be undervalued due to temporary pessimism. This sentiment may change, which can present a buying opportunity.
• Balancing Risk and Reward: Targeting potentially oversold stocks can optimise the risk-reward ratio. This is because the downside may be limited compared to the upside potential.
• Clear Entry Points: This strategy provides clear, technical-based entry points. This can reduce guesswork in timing the market and make investment decisions more straightforward. However, investors should consider factors other than RSI when assessing these stocks. 
• Enhanced Portfolio Diversification: Including low RSI stocks in a portfolio can spread risk across different assets, reducing the overall portfolio volatility.

Risks of Investing in Stocks with RSI Below 30

Here are a few potential risks of investing in stocks with RSI below 30:

• Misleading Signals: The RSI can indicate a buying opportunity when a stock is actually weak. This can lead to investments in stocks that may continue to decline.
• Delayed Recovery: A stock’s RSI being below 30 sometimes means that it will quickly rebound. However, market conditions or specific company issues can delay or prevent recovery, ultimately causing prolonged poor performance.
• High Volatility: Stocks with an RSI below 30 can often experience high volatility. This can lead to significant short-term price swings. This may not suit investors with low risk tolerance or a short investment horizon.

Factors to Consider When Investing in Stocks with RSI Below 30

Here are a few key factors that may be worth considering when investing in stocks with RSI below 30:

• Market Conditions: Investors can check the overall market trends. A low RSI might reflect broader market declines and not just a specific stock’s potential recovery.
• Stock Fundamentals: Investors can review the stock’s fundamentals to confirm that its low RSI isn’t due to worsening business conditions. This could prevent investors from running into further declines.
• Historical Performance: Investors can analyse past RSI trends and stock performance to understand how it has behaved in similar situations. This can provide an insight into possible future movements of shares with RSI below 30.
• Volatility: Investors can prepare for increased volatility. A stock below RSI 30 can be more unpredictable. Therefore, investors can implement risk management strategies, such as stop-loss orders.
• Investment Horizon: Investors can assess whether they can hold the stock through short-term fluctuations. This is because low RSI levels might not lead to immediate rebounds.
• Diversification: Investors can ensure that investing in a stock below 30 RSI aligns with their overall investment strategy and helps diversify their portfolio. This can avoid excessive risk concentration.

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To Wrap It Up…

Stocks with an RSI below 30 can signal oversold conditions and potential buying opportunities, but they should not be evaluated in isolation. Such signals can serve as early warnings or confirmations of broader market trends and technical indicators. However, relying solely on RSI can be insufficient. Hence, it can be crucial to integrate this information with other technical and fundamental parameters to make well-informed decisions. Understanding RSI’s limitations and combining it with thorough research and risk management strategies can enhance your investment approach. By adopting a comprehensive analysis, investors can better navigate the complexities and risks associated with these stocks, potentially capitalising on their rebound opportunities while mitigating potential downsides.

Frequently Asked Questions About Stocks with RSI Below 30