In trading on Thursday, shares of the PowerShares Emerging Markets Sovereign Debt Portfolio ETF (Symbol: PCY) entered into oversold territory, changing hands as low as $28.49 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 PowerShares Emerging Markets Sovereign Debt Portfolio, the RSI reading has hit 20.7 - by comparison, the RSI reading for the S&P 500 is currently 59.2. A bullish investor could look at PCY's 20.7 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), PCY's low point in its 52 week range is $26.50 per share, with $30.96 as the 52 week high point - that compares with a last trade of $28.56. PowerShares Emerging Markets Sovereign Debt Portfolio shares are currently trading down about 3% 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.