In trading on Friday, shares of the iShares MSCI Emerging Markets ETF (Symbol: EEM) entered into oversold territory, changing hands as low as $44.49 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 MSCI Emerging Markets, the RSI reading has hit 28.7 — by comparison, the RSI reading for the S&P 500 is currently 41.6. A bullish investor could look at EEM's 28.7 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), EEM's low point in its 52 week range is $44.47 per share, with $56.175 as the 52 week high point — that compares with a last trade of $44.52. iShares MSCI Emerging Markets shares are currently trading off about 2.1% on the day.
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