5 ETFs for the Next 5 Days: Edges in Gold and Leveraged Technology

Before looking at some of the exchange-traded funds with quantified edges heading into trading on Friday, let’s take a quick review of how the stocks from our last column, 5 Stocks for the Next 5 Days have fared in recent trading.

Basis Monday’s close, we looked at five stocks that had become overbought below the 200-day moving average. All five of these stocks had closed higher for multiple consecutive trading days below the 200-day, and earned 2-period RSI readings of well over 90. In fact, all five stocks had 2-period RSI values of more than 98 when they appeared in our 5 Stocks for the Next 5 Days roster.

And all five stocks have traded significantly lower in the days since we highlighted these stocks as market to avoid – or sell short. Shares of ^DRIV^ have closed lower for three days in a row since making our 5 Stocks for the Next 5 Days roster. Shares of LMT sold off by more than 5% over two days after making our list. ^PAY^ dropped by well over 7% over the three days since appearing in 5 Stocks for the Next 5 Days. Similar moves were seen in the other stocks from our 5 Stocks list, with both ^PLCE^ and ^TIE^ also closing lower for three days in a row after becoming dramatically overbought below the 200-day.


Here are 5 ETFs for the Next 5 Days

Heading into the weekend, the biggest edge is clearly in gold. And not just the gold mining stocks of the ^GDX^, either. Bullion-based funds like the ^GLD^ and the ^IAU^ have also pulled back to levels from which they have historically reversed and moved higher. Both GLD and IAU have dropped by more than 2%, closing lower for two out of the past three sessions above the 200-day moving average.

Traders looking for gold stocks that have pulled back above the 200-day rather than exchange-traded funds may want to keep an eye on stocks like ^NEM^ and ^AUY^.

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Another areas were quantified edges have begun to emerge is in leveraged funds based on technology and the Nasdaq 100. This include ETFs like the ^TYH^ – down more than 9% on Thursday and closing lower for a third day in a row – and the ^QLD^. Shares of the QLD have also closed lower for three days in a row, and fell by more than 6% ahead of trading on Friday.

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David Penn is Editor in Chief of TradingMarkets.com