VHT Crosses Critical Technical Indicator

In trading on Wednesday, shares of the Vanguard Health Care ETF (Symbol: VHT) entered into oversold territory, changing hands as low as $236.985 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 Health Care, the RSI reading has hit 29.3 — by comparison, the RSI reading for the S&P 500 is currently 32.8. A bullish investor could look at VHT's 29.3 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), VHT's low point in its 52 week range is $220.50 per share, with $259.04 as the 52 week high point — that compares with a last trade of $236.87. Vanguard Health Care shares are currently trading down about 0.2% on the day.

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