In trading on Monday, shares of the iShares Silver Trust ETF (Symbol: SLV) entered into oversold territory, changing hands as low as $15.87 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 Silver Trust, the RSI reading has hit 28.0 - by comparison, the RSI reading for the S&P 500 is currently 60.4. A bullish investor could look at SLV's 28.0 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), SLV's low point in its 52 week range is $13.04 per share, with $19.71 as the 52 week high point - that compares with a last trade of $15.91. iShares Silver Trust shares are currently trading off about 3.3% on the day.