In trading on Wednesday, shares of the First Trust Tactical High Yield ETF (Symbol: HYLS) entered into oversold territory, changing hands as low as $48.52 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 Tactical High Yield, the RSI reading has hit 28.2 - by comparison, the RSI reading for the S&P 500 is currently 72.5. A bullish investor could look at HYLS's 28.2 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), HYLS's low point in its 52 week range is $47.25 per share, with $49.76 as the 52 week high point - that compares with a last trade of $48.56. First Trust Tactical High Yield shares are currently trading down about 0.3% 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.