In trading on Monday, shares of the First Trust New York Municipal High Income ETF (Symbol: FMNY) entered into oversold territory, changing hands as low as $26.01 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 First Trust New York Municipal High Income, the RSI reading has hit 28.3 — by comparison, the RSI reading for the S&P 500 is currently 51.9.
A bullish investor could look at FMNY’s 28.3 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), FMNY’s low point in its 52 week range is $25.78 per share, with $27.22 as the 52 week high point — that compares with a last trade of $25.97. First Trust New York Municipal High Income shares are currently trading off about 0.2% on the day.
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