SLX Crowded With Sellers

In trading on Monday, shares of the Steel ETF ( SLX) entered into oversold territory, changing hands as low as $31.23 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 Steel, the RSI reading has hit 28.9 — by comparison, the RSI reading for the S&P 500 is currently 43.9.

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

A bullish investor could look at SLX's 28.9 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), SLX's low point in its 52 week range is $30.63 per share, with $50.48 as the 52 week high point — that compares with a last trade of $31.36. Steel shares are currently trading off about 1.6% on the day.

Steel 1 Year Performance Chart

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