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In this paper we used the theory of adiabatic radial oscillations developed by Chandrasekhar to study the conditions for dynamical stability of constant energy-density stars, or Schwarzschild stars, in the unstudied ultra compact regime beyond the Buchdahl limit, that is, for configurations with radius R in the range R_S < R < (9/8)R_S, where R_S is the Schwarzschild radius of the star. These recently found analytical solutions exhibit a negative pressure region in their centre and, in the limit when R -> R_S, the full interior region of the star becomes filled with negative pressure. Here we present a systematic analysis of the stability of these configurations against radial perturbations. We found that, contrary to the usual expectation found in many classical works, the ultra compact Schwarzschild star is stable against radial oscillations. We computed values of the critical adiabatic index gamma_(c) for several stellar models with varying radius R/R_s and found that it also approaches a finite value as R/R_S -> 1.