In trading on Friday, shares of the iShares Russell 2000 ETF (Symbol: IWM) entered into oversold territory, changing hands as low as $174.255 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 36.1. 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 $162.50 per share, with $212.25 as the 52 week high point — that compares with a last trade of $175.59. iShares Russell 2000 shares are currently trading down about 3.1% on the day.
Also see: ETFs Holding BNFT
Top Ten Hedge Funds Holding SNSS
Top Ten Hedge Funds Holding ACER
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.