In trading on Monday, shares of the iShares U.S. Healthcare ETF (Symbol: IYH) entered into oversold territory, changing hands as low as $137.62 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 U.S. Healthcare, the RSI reading has hit 27.8 - by comparison, the RSI reading for the S&P 500 is currently 36.3. A bullish investor could look at IYH's 27.8 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), IYH's low point in its 52 week range is $108.00 per share, with $164.98 as the 52 week high point - that compares with a last trade of $138.15. iShares U.S. Healthcare shares are currently trading off about 2.4% on the day.