In trading on Monday, shares of the iShares MSCI Japan ETF (Symbol: EWJ) entered into oversold territory, changing hands as low as $56.135 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 iShares MSCI Japan, the RSI reading has hit 28.5 - by comparison, the RSI reading for the S&P 500 is currently 26.0. A bullish investor could look at EWJ's 28.5 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), EWJ's low point in its 52 week range is $56.025 per share, with $64.715 as the 52 week high point - that compares with a last trade of $56.34. iShares MSCI Japan shares are currently trading down about 0.8% on the day.