SCO Crosses Critical Technical Indicator

In trading on Wednesday, shares of the ProShares UltraShort Bloomberg Crude Oil ETF ( SCO) entered into oversold territory, changing hands as low as $52.70 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 ProShares UltraShort Bloomberg Crude Oil, the RSI reading has hit 28.4 — by comparison, the RSI reading for the S&P 500 is currently 55.6.

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

A bullish investor could look at SCO's 28.4 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), SCO's low point in its 52 week range is $24.06 per share, with $110.94 as the 52 week high point — that compares with a last trade of $53.63. ProShares UltraShort Bloomberg Crude Oil shares are currently trading off about 3% on the day.

ProShares UltraShort Bloomberg Crude Oil 1 Year Performance Chart

If you liked this article you might like

Here Are Three Reasons to Short Crude Oil

Here Are Three Reasons to Short Crude Oil

Three Reasons to Short Crude Oil

Three Reasons to Short Crude Oil

Looking for Investments in This Crazy Market? Here Are 2 Longs and 2 Shorts to Watch

Looking for Investments in This Crazy Market? Here Are 2 Longs and 2 Shorts to Watch

SCO April 2nd Options Begin Trading

SCO April 2nd Options Begin Trading

Notable ETF Outflow Detected - SCO

Notable ETF Outflow Detected - SCO