GBF Crosses Critical Technical Indicator

In trading on Monday, shares of the iShares Government/Credit Bond ETF (NYSE:GBF) entered into oversold territory, changing hands as low as $98.44 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 Government/Credit Bond, the RSI reading has hit 25.4 — by comparison, the RSI reading for the S&P 500 is currently 39.4.

A bullish investor could look at GBF's 25.4 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), GBF's low point in its 52 week range is $97.66 per share, with $106.4073 as the 52 week high point — that compares with a last trade of $100.89. iShares Government/Credit Bond shares are currently trading down about 1.8% on the day.