In trading on Tuesday, shares of the Lithium ETF (Symbol: LIT) entered into oversold territory, changing hands as low as $66.56 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 Lithium, the RSI reading has hit 29.3 — by comparison, the RSI reading for the S&P 500 is currently 36.6. A bullish investor could look at LIT's 29.3 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), LIT's low point in its 52 week range is $54.8758 per share, with $97.13 as the 52 week high point — that compares with a last trade of $67.11. Lithium shares are currently trading down about 1.2% 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.
