In trading on Wednesday, shares of the First Trust Preferred Securities and Income ETF (Symbol: FPE) entered into oversold territory, changing hands as low as $19.93 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 Preferred Securities and Income, the RSI reading has hit 28.4 — by comparison, the RSI reading for the S&P 500 is currently 25.2.
A bullish investor could look at FPE’s 28.4 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), FPE’s low point in its 52 week range is $19.90 per share, with $20.76 as the 52 week high point — that compares with a last trade of $19.93. First Trust Preferred Securities and Income shares are currently trading off about 0.2% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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