In trading on Monday, shares of the SCHB ETF (Symbol: SCHB) entered into oversold territory, changing hands as low as $65.65 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 SCHB, the RSI reading has hit 28.9 — by comparison, the RSI reading for the S&P 500 is currently 29.6. A bullish investor could look at SCHB's 28.9 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), SCHB's low point in its 52 week range is $56.12 per share, with $71.36 as the 52 week high point — that compares with a last trade of $65.72. SCHB shares are currently trading off about 0.7% on the day.