iShares Biotechnology Getting Very Oversold
ETF Channel Staff - Thursday, October 19, 3:53 PMIn trading on Thursday, shares of the iShares Biotechnology ETF (IBB) entered into oversold territory, changing hands as low as $117.34 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 Biotechnology, the RSI reading has hit 29.5 — by comparison, the RSI reading for the S&P 500 is currently 38.7.
A bullish investor could look at IBB's 29.5 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), IBB's low point in its 52 week range is $117.30 per share, with $138.74 as the 52 week high point — that compares with a last trade of $117.56. iShares Biotechnology shares are currently trading off about 1.6% on the day.
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