Asia and India country funds and gold are the two areas where high probability traders are likely to find some of the best opportunities in the first half of the trading week. Many of these ETFs at or near oversold levels are noted below.
The major equity index ETFs – especially the ^SPY^ and the ^QQQQ^ – have largely tread water for the past week, albeit with an upward bias in the case of the QQQQ. Also trending toward the higher end of its recent trading range was the ^IWM^.
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Going into the first trading day of the week, India country funds are among the most oversold above the 200-day moving average. This includes funds like the ^INP^, down more than 2% on Friday, and the ^EPI^ (below).
Shares of EPI pulled back by more than 3% ahead of trading on Monday. The fund has been falling sharply over the past several days since reaching a new high back at the beginning of November.
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Regional funds have also been in retreat in recent days. Down well over 1% and closing lower for the third session out of the past four was the ^EZU^. The EMU Index consists of stocks from countries in the European Economic and Monetary Union or EMU.
In addition to country funds in India and Europe, commodity funds representing precious metals like gold and silver and experienced recent short-term selling. Included among these exchange-traded funds are ETFs like the ^IAU^, down two days in a row as of Friday’s close, and the ^GDX^ (below).
Shares of GDX closed on Friday at their most oversold in more than a week.
Closing lower for four out of the past five trading days and increasingly oversold above the 200-day moving average ahead of trading on Monday was the ^FXI^ (below).
Pulling back since the beginning of the month, the iShares FTSE/Xinhua China 25 Index Fund ETF has closed at its lowest level since early October.
In addition to the pullbacks in IAU and GLD, the ^SLV^ dropped more than 3% on Friday.
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David Penn is Editor in Chief of TradingMarkets.com