In trading on Tuesday, shares of the Direxion Daily Financial Bear 3X Shares ETF (Symbol: FAZ) entered into oversold territory, changing hands as low as $31.77 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 Financial Bear 3X Shares, the RSI reading has hit 27.4 — by comparison, the RSI reading for the S&P 500 is currently 51.4.
A bullish investor could look at FAZ’s 27.4 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), FAZ’s low point in its 52 week range is $31.74 per share, with $56.37 as the 52 week high point — that compares with a last trade of $31.76. Direxion Daily Financial Bear 3X Shares shares are currently trading down about 2.8% on the day.
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Further FAZ Research:
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