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IYF Falls below Its 100-day Moving Average: What Does This Mean?

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Apr. 1 2016, Updated 8:07 a.m. ET

Overview of IYF

The iShares Dow Jones US Financial Sector ETF (IYF) seeks to track the performance of the Dow Jones US Financials Index. It has a market capitalization of $1.1 billion as of March 24, 2016. On average, shares worth $7.8 million trade hands each day.

Year-to-date, IYF has fallen 5.8% as worries of a global growth slowdown have triggered a sell-off in the financial sector. However, in the past month, the ETF has risen 5.2% as oil prices have been recovering.

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

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Moving average analysis

On March 24, IYF closed at $83.47, below its 100-day moving average of $84.77 but above its 50-day and 20-day moving averages of $80.38 and $83.04, respectively. IYF broke below its 100-day moving average on March 21, signaling a trend reversal.

RSI

The 14-day relative strength index (or RSI) for IYF is 55 as of March 24, 2016. This suggests that the stock is approaching oversold levels and could be considered undervalued.[1. An RSI figure of below 30 is an indication of an oversold stock, while an RSI of above 70 denotes an overbought stock.]

Read on to study how fund flows to IYF have fared so far.

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