In trading on Wednesday, shares of the Direxion Daily Semiconductors Top 5 Bear 2X ETF (Symbol: TSXD) entered into oversold territory, changing hands as low as $8.39 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 Direxion Daily Semiconductors Top 5 Bear 2X, the RSI reading has hit 29.0 — by comparison, the RSI reading for the S&P 500 is currently 71.2.
A bullish investor could look at TSXD’s 29.0 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), TSXD’s low point in its 52 week range is $7.59 per share, with $24.0078 as the 52 week high point — that compares with a last trade of $8.42. Direxion Daily Semiconductors Top 5 Bear 2X shares are currently trading off about 6.7% on the day.
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