In trading on Monday, shares of the iShares U.S. Home Construction ETF (Symbol: ITB) entered into oversold territory, changing hands as low as $21.88 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. Home Construction, the RSI reading has hit 29.7 - by comparison, the RSI reading for the S&P 500 is currently 36.1. A bullish investor could look at ITB's 29.7 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), ITB's low point in its 52 week range is $21.88 per share, with $29.86 as the 52 week high point - that compares with a last trade of $22.12. iShares U.S. Home Construction shares are currently trading off about 4% on the day.