In trading on Thursday, shares of the iShares 5-10 Year Investment Grade Corporate Bond ETF (Symbol: IGIB) entered into oversold territory, changing hands as low as $47.04 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 iShares 5-10 Year Investment Grade Corporate Bond, the RSI reading has hit 28.4 — by comparison, the RSI reading for the S&P 500 is currently 32.3.
A bullish investor could look at IGIB’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), IGIB’s low point in its 52 week range is $47.04 per share, with $60.18 as the 52 week high point — that compares with a last trade of $47.45. iShares 5-10 Year Investment Grade Corporate Bond shares are currently trading down about 0.8% on the day.
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