In trading on Wednesday, shares of the First Trust Managed Municipal ETF (Symbol: FMB) entered into oversold territory, changing hands as low as $54.8333 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 Managed Municipal, the RSI reading has hit 28.3 — by comparison, the RSI reading for the S&P 500 is currently 45.9. A bullish investor could look at FMB's 28.3 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), FMB's low point in its 52 week range is $54.64 per share, with $57.8399 as the 52 week high point — that compares with a last trade of $54.87. First Trust Managed Municipal shares are currently trading down about 0.2% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
