In trading on Thursday, shares of the First Trust Dow Jones Internet Index Fund ETF (Symbol: FDN) entered into oversold territory, changing hands as low as $127.5425 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 First Trust Dow Jones Internet Index Fund, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 33.7. A bullish investor could look at FDN's 29.9 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), FDN's low point in its 52 week range is $107.06 per share, with $151.58 as the 52 week high point — that compares with a last trade of $128.98. First Trust Dow Jones Internet Index Fund shares are currently trading down about 0.5% on the day.