In trading on Tuesday, shares of the NFRA ETF (Symbol: NFRA) entered into oversold territory, changing hands as low as $55.4665 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 NFRA, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 45.3.
A bullish investor could look at NFRA’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), NFRA’s low point in its 52 week range is $52.44 per share, with $59.92 as the 52 week high point — that compares with a last trade of $55.59. NFRA shares are currently trading off about 1.5% on the day.
Click here to find out what 9 other oversold dividend stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.