In trading on Thursday, shares of the SPDR S&P Oil & Gas Exploration & Production ETF (Symbol: XOP) entered into oversold territory, changing hands as low as $25.85 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 SPDR S&P Oil & Gas Exploration & Production, the RSI reading has hit 29.9 - by comparison, the RSI reading for the S&P 500 is currently 31.8. A bullish investor could look at XOP'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), XOP's low point in its 52 week range is $23.89 per share, with $45.45 as the 52 week high point - that compares with a last trade of $26.07. SPDR S&P Oil & Gas Exploration & Production shares are currently trading off about 2.5% on the day.