In trading on Thursday, shares of Companhia Energetica de Minas Gerais - CEMIG (NYSE:CIG) entered into oversold territory, changing hands as low as $15.07 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 Companhia Energetica de Minas Gerais - CEMIG, the RSI reading has hit 28.6 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 43.8, the RSI of WTI crude oil is at 38.1, and the RSI of Henry Hub Natural Gas is presently 36.1.
A bullish investor could look at CIG's 28.6 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), CIG's low point in its 52 week range is $15.07 per share, with $21.09 as the 52 week high point — that compares with a last trade of $15.28. Companhia Energetica de Minas Gerais - CEMIG shares are currently trading off about 4.5% on the day.
CIG operates in the Electric Utilities sector, among companies like UIL Holding Corp (NYSE:UIL) which is down about 1.8% today, and Portland General Electric Co. (NYSE:POR) trading lower by about 3%. Below is a three month price history chart comparing the stock performance of CIG, versus UIL and POR.
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