In trading on Monday, shares of the SPDR Bloomberg Barclays High Yield Bond ETF (Symbol: JNK) entered into oversold territory, changing hands as low as $35.27 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 SPDR Bloomberg Barclays High Yield Bond, the RSI reading has hit 27.2 - by comparison, the RSI reading for the S&P 500 is currently 41.1. A bullish investor could look at JNK's 27.2 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), JNK's low point in its 52 week range is $35.27 per share, with $37.46 as the 52 week high point - that compares with a last trade of $35.29. SPDR Bloomberg Barclays High Yield Bond shares are currently trading trading flat on the day.