In trading on Tuesday, shares of the LQ ETF (Symbol: LQ) entered into oversold territory, changing hands as low as $23.71 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 LQ, the RSI reading has hit 28.3 — by comparison, the RSI reading for the S&P 500 is currently 55.2.
A bullish investor could look at LQ’s 28.3 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), LQ’s low point in its 52 week range is $23.50 per share, with $25.22 as the 52 week high point — that compares with a last trade of $23.71. LQ shares are currently trading off about 0.6% on the day.
