In trading on Friday, shares of the RODM ETF (Symbol: RODM) entered into oversold territory, changing hands as low as $27.3449 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 RODM, the RSI reading has hit 28.0 — by comparison, the RSI reading for the S&P 500 is currently 39.5. A bullish investor could look at RODM's 28.0 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), RODM's low point in its 52 week range is $24.94 per share, with $29.5292 as the 52 week high point — that compares with a last trade of $27.34. RODM shares are currently trading off about 0.5% 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.