Shares of FBT Now Oversold

In trading on Tuesday, shares of the First Trust NYSE Arca Biotechnology Index Fund ETF (Symbol: FBT) entered into oversold territory, changing hands as low as $198.68 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 First Trust NYSE Arca Biotechnology Index Fund, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 36.7. A bullish investor could look at FBT's 29.9 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), FBT's low point in its 52 week range is $141.375 per share, with $224.9399 as the 52 week high point — that compares with a last trade of $199.57. First Trust NYSE Arca Biotechnology Index Fund shares are currently trading down about 3.1% on the day.

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