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IYF Trades above Its Moving Averages

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Overview of IYF

The iShares US Financials ETF (IYF) seeks to track the performance of the Dow Jones U.S. Financials Index. It has a market capitalization of $1.7 billion as of November 25, 2015. On average, $2.3 million worth of IYF’s shares trade hands every day.

The ETF’s largest holdings are Wells Fargo (WFC), Berkshire Hathaway (BRK.A), JPMorgan Chase (JPM) and Bank of America (BAC). These have weights of 6.4%, 6.3%, 6.1%, and 4.4%, respectively, in IYF.

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Moving average analysis

On November 25, 2015, IYF closed at $90.96, above its 100-day, 50-day, and 20-day moving averages of $89.03, $88.04, and $90.51, respectively. The chart above shows that IYF broke above its 20-day moving average on November 16. This marks the beginning of an upward trend. Technical analysts view such crossovers as trend-reversal signals and view this as a bullish sign.

RSI

IYF’s 14-day relative strength index (or RSI) is 57.1 as of November 25, 2015. This suggests that the stock is approaching overbought levels and may be considered overvalued. Relative Strength Index is a technical indicator that is used to study overbought and oversold levels of a stock. Generally, if the RSI is above 70, it indicates that a stock is overbought. An RSI figure of below 30 suggests that a stock is oversold.

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