In trading on Tuesday, shares of the Vanguard Small-Cap ETF (Symbol: VB) entered into oversold territory, changing hands as low as $218.3145 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 Small-Cap, the RSI reading has hit 28.6 — by comparison, the RSI reading for the S&P 500 is currently 45.3.
A bullish investor could look at VB’s 28.6 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), VB’s low point in its 52 week range is $182 per share, with $241.06 as the 52 week high point — that compares with a last trade of $220.73. Vanguard Small-Cap shares are currently trading off about 1.8% on the day.
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