In trading on Thursday, shares of the Junior Gold Miners ETF (Symbol: GDXJ) entered into oversold territory, changing hands as low as $30.565 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 Junior Gold Miners, the RSI reading has hit 28.7 - by comparison, the RSI reading for the S&P 500 is currently 71.3. A bullish investor could look at GDXJ's 28.7 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), GDXJ's low point in its 52 week range is $16.87 per share, with $52.50 as the 52 week high point - that compares with a last trade of $30.90. Junior Gold Miners shares are currently trading down about 4.5% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.