Market Overview

3 Of The Most Oversold ETFs

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The S&P 500 was able to avoid its first four-day losing streak of the year with a rally on Wednesday.

The broad U.S. stock index is only down one percent from an all-time high, but the number of stocks breaking down to new lows is increasing. On Wednesday the new lows on the NYSE and NASDAQ outpaced the new highs by a ratio that was greater than five-to-one. This occurred as the S&P 500 jumped nearly one percent on the day.

A scan of the most oversold ETFs, based on the RSI indicator, turns up some interesting names. Three of the names that stood out are highlighted below.

Related Link: These 3 ETFs Are Hitting Highs

Global X Lithium ETF (NYSE: LIT) is a basket of 22 stocks that are active in the mining or production of lithium, as well as lithium batteries. The highly-concentrated ETF has 44 percent of its portfolio in the top three holdings, of which produce lithium. The top holdings have been breaking down recently and it has been a drag on the ETF that is now down 4.5 percent over the last 12 months and nearing the May low. The RSI is currently at 9.6.

The iShares Silver ETF (NYSE: SLV) is trading at its lowest level since March 2010 and has lost almost 20 percent of its value over the last 12 months. The ETF tracks the spot price of silver, which has fallen out of favor (along with gold) as the U.S. dollar rallies and investors move into equities. With an RSI of 5.0, the ETF is overdue for a bounce, but trying to pick a bottom can be a dangerous strategy.

The Vanguard Global ex-U.S. Real Estate ETF (NYSE: VNQI) offers exposure to over 550 stocks outside of the United States in the real estate sector. Fifty-five percent of the holdings are in the Pacific region, with Europe making up 22 percent and emerging markets at 18 percent. The RSI is at 11.6 and the ETF is trading at the lowest level since early May. In the last 12 months, VNQI is down 3.3 percent.

 

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