In trading on Tuesday, shares of the PGX ETF (Symbol: PGX) entered into oversold territory, changing hands as low as $12.01 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 PGX, the RSI reading has hit 29.2 — by comparison, the RSI reading for the S&P 500 is currently 37.1. A bullish investor could look at PGX's 29.2 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), PGX's low point in its 52 week range is $11.93 per share, with $15.22 as the 52 week high point — that compares with a last trade of $12.06. PGX shares are currently trading down about 0.7% 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.