Crocs (CROX) Loses -21.22% in 4 Weeks, Here's Why a Trend Reversal May be Around the Corner

Crocs (CROX) has been beaten down lately with too much selling pressure. While the stock has lost 21.2% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price movements.RSI oscillates between zero and 100. Usually, a stock is considered oversold when its RSI reading falls below 30.Technically, every stock oscillates between being overbought and oversold irrespective of the quality of their fundamentals. And the beauty of RSI is that it helps you quickly and easily check if a stock's price is reaching a point of reversal.So, by this measure, if a stock has gotten too far below its fair value just because of unwarranted selling pressure, investors may start looking for entry opportunities in the stock for benefitting from the inevitable rebound.However, like every investing tool, RSI has its limitations, and should not be used alone for making an investment decision.Why a Trend Reversal is Due for CROXThe RSI reading of 28.85 for CROX is an indication that the heavy selling could be in the process of exhausting itself, so the stock could bounce back in a quest for reaching the old equilibrium of supply and demand.The RSI value is not the only factor that indicates a potential turnaround for the stock in the near term. On the fundamental side, there has been strong agreement among the sell-side analysts covering the stock in raising earnings estimates for the current year. Over the last 30 days, the consensus EPS estimate for CROX has increased 0.1%. And an upward trend in earnings estimate revisions usually translates into price appreciation in the near term.Moreover, CROX currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. This is a more conclusive indication of the stock's potential turnaround in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Crocs, Inc. (CROX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks