RSI Alert: Ares Dynamic Credit Allocation Fund Now Oversold

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Ares Dynamic Credit Allocation Fund ( ARDC) presently has a stellar rank, in the top 10% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.

But making Ares Dynamic Credit Allocation Fund an even more interesting and timely stock to look at, is the fact that in trading on Tuesday, shares of ARDC entered into oversold territory, changing hands as low as $15.78 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

START SLIDESHOW:
Click here to find out what 9 other oversold dividend stocks you need to know about »

In the case of Ares Dynamic Credit Allocation Fund, the RSI reading has hit 29.8 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 46.0. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, ARDC's recent annualized dividend of 1.404/share (currently paid in monthly installments) works out to an annual yield of 8.80% based upon the recent $15.96 share price.

If you liked this article you might like

3 Stocks Going Ex-Dividend Tomorrow: RIV, MVC, ARDC

Ex-Dividends To Watch: 3 Stocks Going Ex-Dividend Tuesday: MSP, ARDC, MCY

3 Stocks Going Ex-Dividend Tomorrow: ARDC, PNM, MMC

Ex-Dividends To Watch: 3 Stocks Going Ex-Dividend Tomorrow: CXE, ARDC, GLO

Tomorrow's Ex-Dividends To Watch: ARDC, GOOD, BCR