In trading on Friday, shares of the iShares MSCI Taiwan ETF (Symbol: EWT) entered into oversold territory, changing hands as low as $33.05 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 Taiwan, the RSI reading has hit 29.3 — by comparison, the RSI reading for the S&P 500 is currently 46.4. A bullish investor could look at EWT's 29.3 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), EWT's low point in its 52 week range is $30.22 per share, with $38.45 as the 52 week high point — that compares with a last trade of $33.12. iShares MSCI Taiwan shares are currently trading down about 2% on the day.