VFH Crossed above Its 20-Day Moving Average: Is This Positive?



Overview of VFH

The Vanguard Financials ETF (VFH) seeks to track the performance of the MSCI US Investable Market Financials 25/50 Index. As of February 26, 2016, VFH has a market capitalization of $3.2 billion, making it the second-largest financial ETF after the Financial Select Sector SDPR ETF (XLF). On average, $6.9 million worth of its shares trade hands every day. It has an expense ratio of 0.12%.

VFH’s largest holdings are Wells Fargo (WFC), JPMorgan Chase (JPM), Bank of America (BAC), and Citigroup (C). These stocks have weights of 6.9%, 6.3%, 4.6%, and 4.3%, respectively, in VFH.

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Moving average analysis

On February 26, VFH closed at $43.61. This was below its 100-day and 50-day moving averages of $46.95 and $44.84, respectively, but above its 20-day moving average of $42.82. Currently, VFH is trading 7.4% below its 100-day moving average, 2.6% below its 50-day moving average, and 2.0% above its 20-day moving average.

The chart above shows that VFH broke below its 20-day moving average on February 16, 2016.


The 14-day relative strength index (or RSI) for VFH is 52.3 as of February 26. This suggests that the stock has recovered from oversold levels. An RSI figure of below 30 is an indication that a stock has been oversold, while an RSI figure of above 70 suggests that a stock has been overbought.


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