Shares of UCO Now Oversold
ETF Channel Staff - Friday, October 26, 1:07 PMIn trading on Friday, shares of the Proshares Ultra DJ-UBS Crude Oil ETF (UCO) entered into oversold territory, changing hands as low as $26.60 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 DJ-UBS Crude Oil, the RSI reading has hit 29.6 — by comparison, the RSI reading for the S&P 500 is currently 38.2.
A bullish investor could look at UCO'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), UCO's low point in its 52 week range is $23.13 per share, with $49.86 as the 52 week high point — that compares with a last trade of $26.78. Proshares Ultra DJ-UBS Crude Oil shares are currently trading down about 0.8% on the day.
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