In trading on Monday, shares of Yanzhou Coal Mining Co., Ltd. (NYSE: YZC) entered into oversold territory, changing hands as low as $6.66 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 Yanzhou Coal Mining Co., Ltd., the RSI reading has hit 22.5 — by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 37.1, the RSI of Spot Gold is at 32.9, and the RSI of Spot Silver is presently 32.5.
A bullish investor could look at YZC's 22.5 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), YZC's low point in its 52 week range is $6.66 per share, with $12.24 as the 52 week high point — that compares with a last trade of $6.73. Yanzhou Coal Mining Co., Ltd. shares are currently trading off about 11.2% on the day.
According to the ETF Finder at ETFChannel.com, YZC makes up 3.63% of the Coal ETF (AMEX: KOL) which is trading lower by about 2.8% on the day Monday.
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