In trading on Monday, shares of the iShares 0-5 Year High Yield Corporate Bond ETF (Symbol: SHYG) entered into oversold territory, changing hands as low as $46.32 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 0-5 Year High Yield Corporate Bond, the RSI reading has hit 29.9 - by comparison, the RSI reading for the S&P 500 is currently 41.1. A bullish investor could look at SHYG'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), SHYG's low point in its 52 week range is $45.93 per share, with $48.03 as the 52 week high point - that compares with a last trade of $46.34. iShares 0-5 Year High Yield Corporate Bond shares are currently trading off about 0.6% 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.