In trading on Friday, shares of the SPDR Gold Shares ETF (Symbol: GLD) entered into oversold territory, changing hands as low as $114.80 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 SPDR Gold Shares, the RSI reading has hit 29.6 - by comparison, the RSI reading for the S&P 500 is currently 52.7. A bullish investor could look at GLD'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), GLD's low point in its 52 week range is $107.00 per share, with $131.15 as the 52 week high point - that compares with a last trade of $115.15. SPDR Gold Shares shares are currently trading off about 1.1% 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.