Coal Getting Very Oversold

In trading on Monday, shares of the Coal ETF ( KOL) entered into oversold territory, changing hands as low as $19.76 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 Coal, the RSI reading has hit 27.6 — by comparison, the RSI reading for the S&P 500 is currently 56.7.

Find out what 9 other oversold stocks you need to know about »

A bullish investor could look at KOL's 27.6 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), KOL's low point in its 52 week range is $19.76 per share, with $26.38 as the 52 week high point — that compares with a last trade of $19.80. Coal shares are currently trading down about 1.3% on the day.

Coal 1 Year Performance Chart

If you liked this article you might like

Coal Stocks Get a Bump as Trump Signs Climate Executive Order

Black Gold? China, Trump Could Keep Coal Prices on Upward Path

Look to Energy ETFs to Boost Retirement Portfolio Returns

Here's Why the Bear Market for Coal Prices May Be Nearing the End

Are Twitter Shares Finally Worth Buying Despite the Volatility?