In trading on Friday, shares of the iShares iBoxx $ High Yield Corporate Bond ETF (Symbol: HYG) entered into oversold territory, changing hands as low as $77.56 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 iBoxx $ High Yield Corporate Bond, the RSI reading has hit 29.97 – by comparison, the RSI reading for the S&P 500 is currently 32.0. A bullish investor could look at HYG’s 29.97 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), HYG’s low point in its 52 week range is $77.56 per share, with $91.97 as the 52 week high point – that compares with a last trade of $77.70. iShares iBoxx $ High Yield Corporate Bond shares are currently trading off about 1.6% on the day.
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