Oversold Conditions For ETRACS Alerian MLP Infrastructure ETN (MLPI)

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In trading on Wednesday, shares of ETRACS Alerian MLP Infrastructure ETN ( MLPI) entered into oversold territory, hitting an RSI reading of 28.2, after changing hands as low as $37.16 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 50.4. A bullish investor could look at MLPI's 28.2 RSI reading today 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. The chart below shows the one year performance of MLPI shares:

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

ETRACS Alerian MLP Infrastructure ETN 1 Year Performance Chart

Looking at the chart above, MLPI's low point in its 52 week range is $31.81 per share, with $40.19 as the 52 week high point — that compares with a last trade of $37.23.

If you liked this article you might like

Bull Chart of the Day -- Master Limited Partnership ETF Gets Boost From Williams

An Armful of Volatility

An Armful of Volatility

10 Most Successful New ETFs of 2010

10 Most Successful New ETFs of 2010

Hunt for Yield Leads to MLPs