IBonds Sep 2020 AMT-Free Muni Bond Getting Very Oversold

In trading on Wednesday, shares of the iBonds Sep 2020 AMT-Free Muni Bond ETF ( IBMI) entered into oversold territory, changing hands as low as $24.88 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 iBonds Sep 2020 AMT-Free Muni Bond, the RSI reading has hit 26.8 — by comparison, the RSI reading for the S&P 500 is currently 49.8.

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A bullish investor could look at IBMI's 26.8 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), IBMI's low point in its 52 week range is $24.88 per share, with $25.76 as the 52 week high point — that compares with a last trade of $24.94. iBonds Sep 2020 AMT-Free Muni Bond shares are currently trading off about 0.5% on the day.

iBonds Sep 2020 AMT-Free Muni Bond 1 Year Performance Chart