3 Stocks Near Oversold Territory That Could Be Great Buys Today

Investors looking to score some deals are likely out bargain hunting right now. Many stocks have been suffering big losses lately, and while it may be a little unnerving to buy when the bears are out in full force, it could yield some strong results over the long term.

One way to help spot these bargains is by looking at a stock’s Relative Strength Index (RSI), which can help identify opportunities where share prices have been under a lot of selling pressure lately.

When the RSI for a stock falls below 30, that puts it into oversold territory, suggesting that it could be a good candidate for a rally, especially if it has fallen in value due to no fault of its own.

Below are three stocks that are around an RSI of 30 that I’m definitely going to be keeping my eye on.

Dollarama Inc  (TSX:DOL) has been in and around oversold territory for much of the past two months, briefly dipping in and out of it during that time.

As of Monday’s close, the stock was at an RSI of 33, and while it isn’t oversold just yet, it is close to the threshold. Over the past year, it has never stayed there for a prolonged period.

The stock is currently trading around its 52-week low after a poor performance in its most recent quarter led to a big sell-off. However, I’m not convinced that the stock is hopeless, especially as it provides consumers with an easy way to try and trim costs from their day-to-day expenses.

Unfortunately, it might take a strong quarter to get investors bullish on this stock again. Year to date, Dollarama’s share price has declined by around 30%.

Hudson’s Bay Company (TSX:HBC) is another retailer that has struggled lately, falling 23% since the start of the year. With an RSI level of less than 34, it’s also not quite in oversold territory.

HBC has been involved in a lot of drama over the past year; unfortunately, its poor financials have not done much to entice investors to take a chance on the stock as it has struggled to stay out of the red.

The stock isn’t far from all-time lows, and if it reaches $8 a share, it could be a steal of a deal.

Seven Generations Inc  (TSX:VII) is currently at an RSI of around 35, dropping 20% in just the last three months. For a stock that has shown a lot of growth over the years, Seven Generations could be a bargain, as it’s trading right around its book value and at a very modest 16 times earnings.

While the oil and gas stock may be a bit risky given the industry it’s in, Seven Generations has proven to be the exception thus far, achieving significant growth at a time when many have suffered and closed up shop altogether.

This could be a great long-term buy to add to your portfolio even if it doesn’t drop any further down in price.

Get a Top TSX Stock Pick for 2019 – for FREE

Iain Butler and his team of analysts are giving away one of their top TSX stock picks for 2019 for FREE – for a limited time.

They’ve already helped Stock Advisor Canada members outperform the market by 8X in 2018, but now they’re laser-focused on helping investors in 2019 and beyond.

Click here to discover what could be your top-performing stock for 2019

Fool contributor David Jagielski has no position in any of the stocks mentioned.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.