(VXZ) iPath Series SP500 VIX - Ratings and Ratios

The iPath Series B S&P 500 VIX Mid-Term Futures ETN (VXZ) is designed to give investors exposure to the mid-term futures contracts on the CBOE Volatility Index (VIX), allowing them to capitalize on the volatility of the S&P 500 index. By investing in VXZ, investors are essentially taking a position on the markets expectation of future volatility, as reflected in the prices of VIX futures contracts with maturities between 4-7 months.

To understand the ETNs behavior, its essential to recognize that its tied to the performance of VIX futures contracts, not the VIX index itself. This distinction is crucial because the futures contracts can diverge from the spot VIX index due to factors like contango and backwardation. As a result, VXZs price movements may not perfectly mirror the VIX index, and investors should be aware of this discrepancy when using VXZ as a volatility proxy.

Analyzing the , we observe that VXZ is currently trading below its 20-day and 50-day simple moving averages (SMA20 and SMA50), indicating a short-term downtrend. However, its still above its 200-day simple moving average (SMA200), suggesting a longer-term uptrend. The Average True Range (ATR) is 2.33, representing 4.09% of the current price, which implies moderate volatility. Given the current price of 56.79, and considering the 52-week high and low range (67.71 and 47.79, respectively), we can anticipate that VXZ will likely continue to fluctuate within this range.

Combining the insights from and , we can forecast that VXZ will likely experience a moderate increase in the short term, driven by the ongoing demand for volatility exposure. The relatively low AUM of 38.06M USD may lead to increased volatility, as smaller funds can be more susceptible to significant price movements. If the market continues to experience heightened volatility, VXZ may benefit from the increased demand for mid-term VIX futures contracts, potentially driving the price towards the 52-week high. However, if the market stabilizes, VXZ may face downward pressure, potentially trading towards the 52-week low.

Based on this analysis, a potential trading strategy could involve buying VXZ on dips towards the 52-week low, targeting a price around 60-62, with a stop-loss below 47.79. Conversely, if VXZ breaks above the 52-week high, it may be a sign of increased volatility, and a long position could be considered, targeting a higher price level.