In trading on Tuesday, shares of the iShares California Muni Bond ETF (Symbol: CMF) entered into oversold territory, changing hands as low as $56.345 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 California Muni Bond, the RSI reading has hit 29.6 — by comparison, the RSI reading for the S&P 500 is currently 42.7.
A bullish investor could look at CMF’s 29.6 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), CMF’s low point in its 52 week range is $56.32 per share, with $58.18 as the 52 week high point — that compares with a last trade of $56.39. iShares California Muni Bond shares are currently trading off about 0.3% on the day.
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