After falling 0.26% on Tuesday, SPDR S&P 500 ETF (NYSE: SPY) is now 2.4% below its all-time high. Of course many analysts are expecting a bear market but for now, all we have is a small pullback in an up trend. In the past, buying short-term pullbacks in long-term up trends has been a profitable trading strategy.
Using the TradingMarkets Screener traders can quickly find stocks or ETFs that meet these conditions. For example, the screen below shows the settings to identify ETFs that are above their 200-day moving average (MA) with a ConnorsRSI reading below 20. The long-term up trend is quantified with the 200-day MA. ConnorsRSI is used to quantify the short-term pullback. The average volume is set to a minimum of 100,000 shares and the share price is set to a minimum of $5 in order to eliminate illiquid trading candidates.
At the close on Tuesday, eleven ETFs passed the screen.
These ETFs should be considered potential buys on additional weakness.
Now let’s look at the most overbought and oversold stocks (according to ConnorsRSI) heading into trading for October 1, 2014. ConnorsRSI is a proprietary and quantified momentum oscillator developed by Connors Research that indicates the level to which a security is overbought (high values) or oversold (low values).
GLF (Gulfmark Offshore) is the most oversold stock with a ConnorsRSI reading of 0.06.
SHV (iShares Short Treasury Bond) is the most oversold non-leveraged ETF with a ConnorsRSI reading of 5.97.
MORL (UBS ETRACS Mthly Py 2xLvg Mortg REIT ETN) is the most oversold leveraged ETF with a ConnorsRSI reading of 11.22.
DDC (Dominion Diamond Corp) is the most overbought stock with a ConnorsRSI reading of 97.38.
PGX (PowerShares Preferred ETF) is the most overbought ETF with a ConnorsRSI reading of 89.92.
TradingMarkets Lists provide users pre-populated lists of stocks and ETFs identifying symbols with overbought and oversold ConnorsRSI and Bollinger Bands® readings. The Screener Lists are powered by The TradingMarkets Screener.
All data is as of the end of day on 9/30/2014.