In trading on Friday, shares of the Vanguard Communication Services ETF (Symbol: VOX) entered into oversold territory, changing hands as low as $125.11 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 Communication Services, the RSI reading has hit 29.1 — by comparison, the RSI reading for the S&P 500 is currently 31.1.
A bullish investor could look at VOX’s 29.1 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), VOX’s low point in its 52 week range is $119.04 per share, with $151.268 as the 52 week high point — that compares with a last trade of $126.51. Vanguard Communication Services shares are currently trading off about 1.9% 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.
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