In trading on Monday, shares of the iShares Russell 2000 Growth ETF (Symbol: IWO) entered into oversold territory, changing hands as low as $131.76 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 Growth, the RSI reading has hit 27.8 - by comparison, the RSI reading for the S&P 500 is currently 33.3. A bullish investor could look at IWO'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), IWO's low point in its 52 week range is $120.67 per share, with $159.71 as the 52 week high point - that compares with a last trade of $132.73. iShares Russell 2000 Growth shares are currently trading down about 3.6% on the day.