In trading on Tuesday, shares of the Vanguard Short-Term Bond ETF (Symbol: BSV) entered into oversold territory, changing hands as low as $80.28 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 Short-Term Bond, the RSI reading has hit 29.5 — by comparison, the RSI reading for the S&P 500 is currently 44.2. A bullish investor could look at BSV's 29.5 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), BSV's low point in its 52 week range is $80.28 per share, with $82.88 as the 52 week high point — that compares with a last trade of $80.30. Vanguard Short-Term Bond shares are currently trading down about 0.1% 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.
