In trading on Friday, shares of the iShares Dow Jones U.S. ETF (Symbol: IYY) entered into oversold territory, changing hands as low as $108.02 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 Dow Jones U.S., the RSI reading has hit 27.7 — by comparison, the RSI reading for the S&P 500 is currently 28.8.
A bullish investor could look at IYY’s 27.7 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), IYY’s low point in its 52 week range is $93.165 per share, with $118.98 as the 52 week high point — that compares with a last trade of $108.22. iShares Dow Jones U.S. shares are currently trading off about 1.8% 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.