PSK Crosses Critical Technical Indicator

In trading on Wednesday, shares of the SPDR Wells Fargo Preferred Stock ETF (PSK) entered into oversold territory, changing hands as low as $43.73 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 SPDR Wells Fargo Preferred Stock, the RSI reading has hit 23.3 — by comparison, the RSI reading for the S&P 500 is currently 42.2.

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A bullish investor could look at PSK's 23.3 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), PSK's low point in its 52 week range is $42.94 per share, with $45.18 as the 52 week high point — that compares with a last trade of $43.80. SPDR Wells Fargo Preferred Stock shares are currently trading off about 1.6% on the day.

SPDR Wells Fargo Preferred Stock 1 Year Performance Chart

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