In trading on Thursday, shares of the iShares California Muni Bond ETF (Symbol: CMF) entered into oversold territory, changing hands as low as $119.00 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 California Muni Bond, the RSI reading has hit 28.7 - by comparison, the RSI reading for the S&P 500 is currently 48.4. A bullish investor could look at CMF's 28.7 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), CMF's low point in its 52 week range is $116.28 per share, with $122.50 as the 52 week high point - that compares with a last trade of $119.02. iShares California Muni Bond shares are currently trading down about 0.2% 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.