Bloomberg: High Probability Historical Buy Signal in the Volatility Factor Return, Elevated valuations and uncertain earnings prospects may slow the pace of equity gains, while history suggests low volatility stocks' outlook is brightening. The long/short volatility factor group's recent sub-30 reading in the 10-week RSI has led to reversal (low volatility shares start outperforming high volatility shares) in 90% of cases in the last 10 years.volatility has reached oversold levels (defined as a 10-week RSI below 30) on 30 occasions since 2010 and on 27 of those 30 the long/short volatility factor improved over the next eight weeks (two months). This high historical probability for recovery in the volatility factor suggests a mean reversion move - where low volatility stocks outperform high volatility ones - is possible this summer.