VMBS Crosses Critical Technical Indicator


In trading on Friday, shares of the Vanguard Mortgage-Backed Securities ETF (Symbol: VMBS) entered into oversold territory, changing hands as low as $52.23 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 Mortgage-Backed Securities, the RSI reading has hit 28.8 — by comparison, the RSI reading for the S&P 500 is currently 47.3.

A bullish investor could look at VMBS’s 28.8 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), VMBS’s low point in its 52 week range is $52.23 per share, with $54.13 as the 52 week high point — that compares with a last trade of $52.30. Vanguard Mortgage-Backed Securities shares are currently trading off about 0.3% on the day.


Click here to find out what 9 other oversold dividend stocks you need to know about »



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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