In trading on Friday, shares of the Oil Services ETF (Symbol: OIH) entered into oversold territory, changing hands as low as $28.41 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 Oil Services, the RSI reading has hit 29.98 - by comparison, the RSI reading for the S&P 500 is currently 50.4. A bullish investor could look at OIH's 29.98 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), OIH's low point in its 52 week range is $26.10 per share, with $36.35 as the 52 week high point - that compares with a last trade of $28.57. Oil Services shares are currently trading off about 1.6% on the day.