In trading on Wednesday, shares of the Proshares UltraShort QQQ ETF (QID) entered into oversold territory, changing hands as low as $51.37 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 Proshares UltraShort QQQ, the RSI reading has hit 29.8 — by comparison, the RSI reading for the S&P 500 is currently 68.3.
A bullish investor could look at QID's 29.8 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), QID's low point in its 52 week range is $51.24 per share, with $100.64 as the 52 week high point — that compares with a last trade of $51.37. Proshares UltraShort QQQ shares are currently trading off about 0.8% on the day.