Shares of HECA Now Oversold

In trading on Wednesday, shares of the Hedgeye Capital Allocation ETF (Symbol: HECA) entered into oversold territory, changing hands as low as $28.55 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 Hedgeye Capital Allocation, the RSI reading has hit 28.2 — by comparison, the RSI reading for the S&P 500 is currently 46.9. A bullish investor could look at HECA's 28.2 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), HECA's low point in its 52 week range is $24.84 per share, with $30.90 as the 52 week high point — that compares with a last trade of $28.66. Hedgeye Capital Allocation shares are currently trading down about 0.6% on the day.

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