In trading on Tuesday, shares of the Euro Trust ETF (FXE) entered into oversold territory, changing hands as low as $132.80 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 Euro Trust, the RSI reading has hit 28.5 — by comparison, the RSI reading for the S&P 500 is currently 58.7.
A bullish investor could look at FXE's 28.5 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), FXE's low point in its 52 week range is $129.79 per share, with $137.87 as the 52 week high point — that compares with a last trade of $132.82. Euro Trust shares are currently trading down about 0.4% on the day.