uploads///VFH MA

Should VFH Be Sold at Current Levels ?

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Overview of VFH

The Vanguard Financials ETF (VFH) seeks to track the performance of the MSCI US Investable Market Financials 25/50 Index. On September 25, it had a market capitalization of $3.08 billion, making it the second largest financial ETF after the Financial Select Sector SDPR ETF (XLF). On average, $1.65 million worth of VFH shares trade hands every day. It has an expense ratio of 0.12%

Its largest holdings are Wells Fargo (WFC), JPMorgan Chase (JPM), Bank of America (BAC), and Citigroup (C). These have weights of 6.92%, 6.25%, 4.60%, and 4.34%, respectively, in the VFH ETF.

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Moving average analysis

On September 25, the VFH closed at $46.65, below its 100-day, 50-day, and 20-day moving averages of $47.14, $49.20, and $49.63, respectively. The chart below shows that the VFH fell below its 100-day moving average on September 4. This is a sign of a falling trend. Although the price approached the resistance level of $47.16 on September 11, it could not breach it and fell again. It now trades in negative territory.

Also, the 20-day moving average and 50-day moving average seem to be approaching each other, and a crossover is possible.

RSI

The 14-day Relative Strength Index, or RSI, for the VFH ETF was 35.66 on September 25. This suggests the stock is approaching oversold levels and may be considered undervalued. An RSI figure below 30 is an indication of an oversold stock, while an RSI above 70 denotes an overbought stock.

 

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