Heading into trading on Friday, there is no more oversold group
of exchange-traded funds than the bond ETFs. Whether you are
looking at the
iShares Barclays Aggregate Bond Fund ETF
) or the inflation-protected,
iShares Barclays TIPS Bond Fund ETF
), the fact of the matter is that these funds have been selling off
sharply over the past few days, and could represent potential
opportunity for short-term traders and more active investors.
The iShares Barclays Aggregate Bond Fund ETF, for example, has
closed lower for three days in a row, and is now technically
oversold above the 200-day moving average. The pullback in AGG has
taken the fund to new, one-week lows, and to the lower end of a
relatively volatile trading range that arguably extends back to the
beginning of the year.
With a short-term positive edge of 1%, AGG was last in oversold
territory a little over a week ago. Then, a four-day sell-off in
AGG resulted in an even more powerful four-day rally. The current
selling in AGG represents at least in part some profit-taking from
this short-term move toward long-term highs.
Much the same can be said of the
Vanguard Total Bond Market ETF
). Down three in a row and taking a positive, short-term edge of
just over half a percent into Friday's trading, shares of BND have
technically oversold territory
, and may become attractive to short-term traders looking to buy
weakness in markets, like BND, that are still trading in bull
The iShares Barclays TIPS Bond Fund has only closed lower for
two days in a row, but this selling has been more than a enough to
drag the ETF into technically oversold territory as of Thursday's
close. Trading in a range for nearly a month, TIP will need to fall
further before it truly breaks down from that range and starts
setting major new lows.
That said, of all the bond ETFs in today's report, it is the TIP
that has the biggest positive edge in the short-term heading into
trading on Friday, notching an
of nearly one and a quarter percent.
Stock ratings provided courtesy of
. Information about quantified edges on stocks provided courtesy
is Editor in Chief of TradingMarkets.com