In trading on Monday, shares of the iShares 0-5 Year Investment Grade Corporate Bond ETF (Symbol: SLQD) entered into oversold territory, changing hands as low as $51.39 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 iShares 0-5 Year Investment Grade Corporate Bond, the RSI reading has hit 28.9 — by comparison, the RSI reading for the S&P 500 is currently 56.0.
A bullish investor could look at SLQD’s 28.9 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), SLQD’s low point in its 52 week range is $51.39 per share, with $52.22 as the 52 week high point — that compares with a last trade of $51.40. iShares 0-5 Year Investment Grade Corporate Bond shares are currently trading off about 0.2% on the day.
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