In trading on Wednesday, shares of the Emerging Markets SmallCap ETF (AMEX: DGS) entered into oversold territory, changing hands as low as $45.66 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 Emerging Markets SmallCap, the RSI reading has hit 29.2 — by comparison, the RSI reading for the S&P 500 is currently 36.6.
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A bullish investor could look at DGS's 29.2 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), DGS's low point in its 52 week range is $42.10 per share, with $50.30 as the 52 week high point — that compares with a last trade of $45.79. Emerging Markets SmallCap shares are currently trading down about 1.1% on the day.
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