Fair Isaac Analysis - Is FICO Going to Rebound? - Fair Isaac (NYSE:FICO)

Fair Isaac Corporation (NYSE:FICO) shares are trading lower on Tuesday after dropping almost 17% on Friday, when a top federal housing regulator criticized its pricing and the reliance on FICO scores in mortgage lending. But now the shares are oversold and at a support level. These can be bullish dynamics that suggest a move higher. This is why Fair Isaac is the Stock of the Day. Most of the time, a stock stays within its normal or typical trading range. If aggressive and emotional sellers push it below this range, traders say it is oversold. This is important because many trading strategies and models are based on the concept of reversion to the mean. Oversold conditions will draw buyers into the market. Their buying could push the shares higher. The red line on the price chart is called a Bollinger Band. It is two standard deviations below the 20-day moving average. According to statistics and probability theory, 95% of trading should occur within two standard deviations of the mean. If the shares are below this threshold, like they are now, they are considered to be oversold. The lower part of the chart is the Relative Strength Index (RSI). It is another tool traders use to determine if a stock is oversold. If the blue line is close to or below the red horizontal line, it indicates oversold conditions. As you can see, this is the case now. In addition to being oversold, Fair Issac is also at a support level. Support is a price level where there is a large amount of demand or buy orders for a stock. As you can see on the chart, there is support around the $920 level. The combination of being oversold while at support can be a bullish dynamic. Shares of Fair Issac may be about to head higher. FICO Price Action: Fair Isaac shares were down 2.92% at $905.00 at the time of publication on Tuesday. The stock is near its 52-week low of $870.01, according to Benzinga Pro data.