In trading on Wednesday, shares of the India Small-Cap Index ETF (SCIF) entered into oversold territory, changing hands as low as $28.08 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 India Small-Cap Index, the RSI reading has hit 28.4 — by comparison, the RSI reading for the S&P 500 is currently 44.9.
A bullish investor could look at SCIF's 28.4 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), SCIF's low point in its 52 week range is $27.20 per share, with $46.60 as the 52 week high point — that compares with a last trade of $28.26. India Small-Cap Index shares are currently trading down about 2.4% on the day.