When Technical Pain Becomes Opportunity: What TARS's Oversold Signal Means for Traders

The saying goes: fear is often where profits hide. On Thursday, Tarsus Pharmaceuticals (TARS) just painted a textbook oversold picture on the charts, with its Relative Strength Index (RSI) plunging to 26.6—well below the 30 threshold that signals capitulation.

**The Numbers Tell a Story**

At its lowest point during the session, TARS dipped to $72.845 per share before settling around $73.00. For context, the broader market (SPY) shows an RSI of 59.5, meaning there's a stark divergence in momentum. Within its 52-week range, the stock has traded as low as $38.51 and as high as $85.25—so Thursday's weakness isn't breaking new ground, but it's still steep territory.

**Why This Matters**

An RSI below 30 on Tarsus Pharmaceuticals suggests that selling pressure may be reaching exhaustion. When momentum indicators get this stretched, contrarian traders often treat it as a potential inflection point. The question isn't whether TARS bounces—it's whether buyers step in before the rebound starts.

The divergence between TARS's depressed technical condition and the relative strength of the broader market creates an interesting setup. While the S&P 500 remains in neutral momentum, Tarsus is bleeding selling pressure, which could mean the pain trade for shorts is building into a buy signal for longs.

For those watching the tape, this is the kind of setup where patient capital sometimes gets rewarded.