In trading on Tuesday, shares of the iShares MBS ETF (Symbol: MBB) entered into oversold territory, changing hands as low as $107.89 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 MBS, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 39.5.
A bullish investor could look at MBB’s 29.9 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), MBB’s low point in its 52 week range is $107.89 per share, with $110.45 as the 52 week high point — that compares with a last trade of $107.97. iShares MBS shares are currently trading off about 0.1% on the day.
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