FEZ’s moving averages
On November 11, 76% of the portfolio holdings of the SPDR Euro Stoxx 50 ETF (FEZ) closed above their 100-day moving average as compared to 73% on November 10. 84% of the fund’s portfolio holdings closed above their 50-day moving averages and 60% of the portfolio holdings closed above their 20-day moving averages on November 11.
There has been a gradual downward change in the percentage of holdings that are trading above 50-day and 20-day moving averages. This indicates that in the short term, most of the equity holdings have been avoiding an uptrend. The upward change in the percentage of holdings trading above their 100-day moving average indicates that most of the portfolio holdings are moving towards an uptrend by maintaining the 100-day moving average as a strong support point.
The above graph shows the percentage of FEZ’s portfolio holdings that were above their 100-day, 50-day, and 20-day moving averages, as well as a relative strength index analysis.
FEZ’s relative strength index
On November 11, 90% of the fund’s portfolio holdings were in between a 70-30 relative strength index (or RSI). 7% of the portfolio holdings had an RSI above 70, and 3% of the portfolio holdings had an RSI below 30.
What do moving averages and relative strength indexes indicate?
Moving average is the average stock price over a certain period of time. It is a trend-following indicator. It is also known as the lagging indicator because it is calculated based on past prices.
RSI is a technical indicator used to determine the overbought and oversold zone of a stock. If the RSI is above 70, it indicates the stock is overbought and if the RSI is below 30, it indicates the stock is oversold. Here, most of the portfolio holdings were in between the 70-30 range, which shows that the fund was neither overbought nor oversold.
The large capitalization stocks of FEZ such as Sanofi (SNY), Total (TOT), Banco Santander (SAN), Siemens (SIEGY), and Anheuser-Busch (BUD) had provided a weighted return of 0.01%, 0.002%, 0.03%, -0.03%, and 0.07%, respectively.
In the next part of the series, we’ll analyze FEZ with respect to its volatility and mean return.