IEO Crosses Critical Technical Indicator

In trading on Wednesday, shares of the iShares U.S. Oil & Gas Exploration & Production ETF ( IEO) entered into oversold territory, changing hands as low as $87.01 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 iShares U.S. Oil & Gas Exploration & Production, the RSI reading has hit 29.4 — by comparison, the RSI reading for the S&P 500 is currently 51.5.

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

A bullish investor could look at IEO'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), IEO's low point in its 52 week range is $76.88 per share, with $99.88 as the 52 week high point — that compares with a last trade of $87.50. iShares U.S. Oil & Gas Exploration & Production shares are currently trading down about 1.2% on the day.

iShares U.S. Oil & Gas Exploration & Production 1 Year Performance Chart

If you liked this article you might like

With OPEC Looking to Expand Production Curbs, Oil Investors Are Hopeful That Prices Have Stabilized

Look to Energy ETFs to Boost Retirement Portfolio Returns

3 ETFs to Consider Now That OPEC Has Cut Production

First Week Of IEO February 2015 Options Trading