In trading on Thursday, shares of the iShares U.S. Preferred Stock ETF (Symbol: PFF) entered into oversold territory, changing hands as low as $36.47 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 U.S. Preferred Stock, the RSI reading has hit 27.7 - by comparison, the RSI reading for the S&P 500 is currently 31.1. A bullish investor could look at PFF's 27.7 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), PFF's low point in its 52 week range is $32.32 per share, with $40.17 as the 52 week high point - that compares with a last trade of $36.54. iShares U.S. Preferred Stock shares are currently trading off about 1.3% on the day.