In trading on Wednesday, shares of the Vanguard Utilities ETF (Symbol: VPU) entered into oversold territory, changing hands as low as $144.78 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 Vanguard Utilities, the RSI reading has hit 29.7 — by comparison, the RSI reading for the S&P 500 is currently 25.2.
A bullish investor could look at VPU’s 29.7 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), VPU’s low point in its 52 week range is $128.07 per share, with $156.94 as the 52 week high point — that compares with a last trade of $145.46. Vanguard Utilities shares are currently trading down about 0.9% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.