In trading on Friday, shares of the SPDR Barclays High Yield Bond ETF (Symbol: JNK) entered into oversold territory, changing hands as low as $32.54 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 SPDR Barclays High Yield Bond, the RSI reading has hit 25.2 – by comparison, the RSI reading for the S&P 500 is currently 32.0. A bullish investor could look at JNK’s 25.2 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), JNK’s low point in its 52 week range is $32.54 per share, with $39.79 as the 52 week high point – that compares with a last trade of $32.62. SPDR Barclays High Yield Bond shares are currently trading down about 1.6% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.