In trading on Friday, shares of the iShares Global Materials ETF (MXI) entered into oversold territory, changing hands as low as $55.25 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 Global Materials, the RSI reading has hit 28.5 — by comparison, the RSI reading for the S&P 500 is currently 45.8.

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A bullish investor could look at MXI'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), MXI's low point in its 52 week range is $55.09 per share, with $66.14 as the 52 week high point — that compares with a last trade of $55.35. iShares Global Materials shares are currently trading down about 1.4% on the day.

iShares Global Materials 1 Year Performance Chart

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