In trading on Thursday, shares of the EWL ETF (Symbol: EWL) entered into oversold territory, changing hands as low as $39.82 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of EWL, the RSI reading has hit 29.6 — by comparison, the RSI reading for the S&P 500 is currently 36.4. A bullish investor could look at EWL's 29.6 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), EWL's low point in its 52 week range is $39.04 per share, with $53.06 as the 52 week high point — that compares with a last trade of $39.69. EWL shares are currently trading down about 1.5% on the day.
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