In trading on Thursday, shares of the Daily Latin America Bull 3x Shares ETF (LBJ) entered into oversold territory, changing hands as low as $19.37 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 Daily Latin America Bull 3x Shares, the RSI reading has hit 29.4 — by comparison, the RSI reading for the S&P 500 is currently 46.3.
A bullish investor could look at LBJ's 29.4 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), LBJ's low point in its 52 week range is $16.99 per share, with $42.42 as the 52 week high point — that compares with a last trade of $19.47. Daily Latin America Bull 3x Shares shares are currently trading down about 2.7% on the day.