In trading on Friday, shares of Key Energy Services, Inc. (NYSE: KEG) entered into oversold territory, changing hands as low as $7.17 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 Key Energy Services, Inc., the RSI reading has hit 26.9 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 50.0, the RSI of WTI Crude Oil is at 49.9, and the RSI of Henry Hub Natural Gas is presently 24.7.
A bullish investor could look at KEG's 26.9 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), KEG's low point in its 52 week range is $6.06 per share, with $10.52 as the 52 week high point — that compares with a last trade of $7.29. Key Energy Services, Inc. shares are currently trading off about 12.8% on the day.
According to the ETF Finder at ETFChannel.com, KEG makes up 2.39% of the PowerShares Dynamic Oil & Gas Services Portfolio ETF (AMEX: PXJ) which is trading lower by about 0.1% on the day Friday.
Can your brain be trained to become a chart-predicting wizard? Click here to find out
