In trading on Tuesday, shares of the First Trust Nasdaq Cybersecurity ETF (Symbol: CIBR) entered into oversold territory, changing hands as low as $45.28 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 First Trust Nasdaq Cybersecurity, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 26.6.
A bullish investor could look at CIBR’s 29.9 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), CIBR’s low point in its 52 week range is $39.1811 per share, with $56.583 as the 52 week high point — that compares with a last trade of $45.78. First Trust Nasdaq Cybersecurity shares are currently trading down about 3.3% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.