In trading on Monday, shares of the ProShares Ultra Communication Services ETF (Symbol: LTL) entered into oversold territory, changing hands as low as $22.5901 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 ProShares Ultra Communication Services, the RSI reading has hit 27.3 — by comparison, the RSI reading for the S&P 500 is currently 53.5.
A bullish investor could look at LTL’s 27.3 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), LTL’s low point in its 52 week range is $21.8801 per share, with $29.67 as the 52 week high point — that compares with a last trade of $22.59. ProShares Ultra Communication Services shares are currently trading off about 5% on the day.
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Further LTL Research:
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