IWM Crowded With Sellers

In trading on Thursday, shares of the iShares Russell 2000 ETF (Symbol: IWM) entered into oversold territory, changing hands as low as $204.5043 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 Russell 2000, the RSI reading has hit 29.8 — by comparison, the RSI reading for the S&P 500 is currently 36.6. A bullish investor could look at IWM's 29.8 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), IWM's low point in its 52 week range is $191.34 per share, with $244.98 as the 52 week high point — that compares with a last trade of $207.43. iShares Russell 2000 shares are currently trading off about 0.8% on the day.

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