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 iShares iBoxx $ High Yield Corporate Bond, the RSI reading has hit 29.3 – by comparison, the RSI reading for the S&P 500 is currently 28.8. A bullish investor could look at HYG’s 29.3 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), HYG’s low point in its 52 week range is $80.78 per share, with $88.03 as the 52 week high point – that compares with a last trade of $80.84. iShares iBoxx $ High Yield Corporate Bond shares are currently trading off about 0.6% on the day.
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) was trading at $80.45 per share on Thursday afternoon, down $0.89 (-1.09%). Year-to-date, HYG has declined -6.27%, versus a -6.86% rise in the benchmark S&P 500 index during the same period.
HYG currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 50 ETFs in the High Yield Bond ETFs category.
This article is brought to you courtesy of ETF Channel.
