First Trust Multi Cap Growth AlphaDEX Fund (FAD) Enters Oversold Territory

In trading on Wednesday, shares of the First Trust Multi Cap Growth AlphaDEX Fund ETF ( FAD) entered into oversold territory, changing hands as low as $48.99 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 First Trust Multi Cap Growth AlphaDEX Fund, the RSI reading has hit 28.4 — by comparison, the RSI reading for the S&P 500 is currently 36.9.

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A bullish investor could look at FAD'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), FAD's low point in its 52 week range is $43.05 per share, with $53.55 as the 52 week high point — that compares with a last trade of $48.99. First Trust Multi Cap Growth AlphaDEX Fund shares are currently trading off about 0.8% on the day.