In trading on Monday, shares of the DB Commodity Index Tracking Fund ETF (DBC) entered into oversold territory, changing hands as low as $25.17 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 DB Commodity Index Tracking Fund, the RSI reading has hit 28.8 — by comparison, the RSI reading for the S&P 500 is currently 35.3.
A bullish investor could look at DBC's 28.8 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), DBC's low point in its 52 week range is $24.11 per share, with $29.86 as the 52 week high point — that compares with a last trade of $25.19. DB Commodity Index Tracking Fund shares are currently trading off about 0.9% on the day.