In trading on Thursday, shares of the First Trust ISE Global Copper Index Fund ETF (CU) entered into oversold territory, changing hands as low as $21.00 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 First Trust ISE Global Copper Index Fund, the RSI reading has hit 23.6 — by comparison, the RSI reading for the S&P 500 is currently 44.2.
A bullish investor could look at CU's 23.6 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), CU's low point in its 52 week range is $21.00 per share, with $32.24 as the 52 week high point — that compares with a last trade of $21.02. First Trust ISE Global Copper Index Fund shares are currently trading down about 5% on the day.