In trading on Wednesday, shares of the PowerShares Financial Preferred Portfolio ETF (Symbol: PGF) entered into oversold territory, changing hands as low as $18.50 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 Financial Preferred Portfolio, the RSI reading has hit 28.2 - by comparison, the RSI reading for the S&P 500 is currently 52.1. A bullish investor could look at PGF's 28.2 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), PGF's low point in its 52 week range is $17.46 per share, with $19.56 as the 52 week high point - that compares with a last trade of $18.52. PowerShares Financial Preferred Portfolio shares are currently trading down about 0.7% on the day.