Vanguard Mortgage-Backed Securities ETF Hits Oversold Levels: What It Means for Investors
On Tuesday, shares of the Vanguard Mortgage-Backed Securities ETF (Symbol: VMBS) reached an oversold status, trading as low as $45.505. The term “oversold” is determined by the Relative Strength Index (RSI), a technical analysis tool that indicates momentum on a scale from 0 to 100. When the RSI drops below 30, the stock is considered oversold.
For VMBS, the RSI currently stands at 29.2, while the S&P 500 has an RSI of 49.6, suggesting that the Vanguard ETF is experiencing stronger selling pressure compared to the broader market.
Investors with a bullish outlook may interpret the 29.2 RSI reading as a potential signal that the selling trend is nearing its end. This could present opportunities to buy shares at a bargain.
Examining VMBS’s one-year performance, its lowest price in the past 52 weeks was $43.275, with a peak of $47.59. The latest trade was at $45.53, indicating the ETF is down approximately 0.3% for the day.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
