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We calculated the relative strength values of all the most popular dividend ETFs in the U.S and Canada. This indicator is very useful in showing which stocks, or ETFs, are oversold or overbought.
Here they are, ordered by RSIA, which is an average of all timeframes (short, medium, and long).
(please click to enlarge)
Top 10 most oversold:
DXJ
XDV.TO
DFJ
DES
PEY
DTH
DWX
DIM
DOL
DOO
The most oversold is DXJ (Japan total dividend)
Top 10 most overbought:
PFM
FVD
DTN
DNL
CVY
CDZ.TO
DHS
FDL
DEB
DOD
The most overbought is DOD, Dogs of the Dow.
Dogs of the Dow Theory (wiki)
"The theory proposes that an investor annually select for investment the ten Dow Jones Industrial Average stocks whose dividend is the highest fraction of their price.
Proponents of the Dogs of the Dow strategy argue that blue chip companies do not alter their dividend to reflect trading conditions and, therefore, the dividend is a measure of the average worth of the company; the stock price, in contrast, fluctuates through the business cycle. This should mean that companies with a high yield, with high dividend relative to price, are near the bottom of their business cycle and are likely to see their stock price increase faster than low yield companies. Under this model, an investor annually reinvesting in high-yield companies should out-perform the overall market. The logic behind this is that a high dividend yield suggests both that the stock is oversold and that management believes in its companies prospects and is willing to back that up by paying out a relatively high dividend. Investors are thereby hoping to benefit from both above average stock price gains as well as a relatively high quarterly dividend. Of course, several assumptions are made in this argument. The first assumption is that the dividend price reflects the company size rather than the company business model. The second is that companies have a natural, repeating cycle in which good performances are predicted by bad ones."
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