In trading on Thursday, shares of the USMC ETF (Symbol: USMC) entered into oversold territory, changing hands as low as $24.65 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 USMC, the RSI reading has hit 28.8 - by comparison, the RSI reading for the S&P 500 is currently 27.1. A bullish investor could look at USMC's 28.8 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), USMC's low point in its 52 week range is $24.58 per share, with $28.66 as the 52 week high point - that compares with a last trade of $24.88. USMC shares are currently trading down about 1.2% on the day.