ProShares Ultra Basic Materials (UYM) Enters Oversold Territory

In trading on Monday, shares of the ProShares Ultra Basic Materials ETF ( UYM) entered into oversold territory, changing hands as low as $47.53 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 Ultra Basic Materials, the RSI reading has hit 29.8 — by comparison, the RSI reading for the S&P 500 is currently 38.3.

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A bullish investor could look at UYM's 29.8 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), UYM's low point in its 52 week range is $42.39 per share, with $58.40 as the 52 week high point — that compares with a last trade of $47.51. ProShares Ultra Basic Materials shares are currently trading down about 4.5% on the day.

ProShares Ultra Basic Materials 1 Year Performance Chart

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