In trading on Monday, shares of the ProShares Short S&P500 ETF (Symbol: SH) entered into oversold territory, changing hands as low as $35.14 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 ProShares Short S&P500, the RSI reading has hit 29.2 - by comparison, the RSI reading for the S&P 500 is currently 70.9. A bullish investor could look at SH's 29.2 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), SH's low point in its 52 week range is $35.14 per share, with $46.74 as the 52 week high point - that compares with a last trade of $35.14. ProShares Short S&P500 shares are currently trading off about 0.4% 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.