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 SPDR Bloomberg Barclays High Yield Bond, the RSI reading has hit 27.8 — by comparison, the RSI reading for the S&P 500 is currently 37.3. A bullish investor could look at JNK’s 27.8 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), JNK’s low point in its 52 week range is $34.58 per share, with $37.05 as the 52 week high point — that compares with a last trade of $34.58. SPDR Bloomberg Barclays High Yield Bond shares are currently trading off about 0.6% on the day.
The SPDR Bloomberg Barclays High Yield Bond ETF (JNK) was trading at $34.62 per share on Thursday morning, down $0.17 (-0.49%). Year-to-date, JNK has declined -4.04%, versus a 1.42% rise in the benchmark S&P 500 index during the same period.
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