Country Funds, Tech Climb to Overbought Levels Below 200-Day
In my last 5 ETFs for the Next 5 Days column, I pointed out potential opportunities in both gold and leveraged technology ETFs. By way of recap, both the ^GLD^ and the ^IAU^ have since rallied into strength, closing with 2-period RSIs of more than 70. The same is also true for the technology-related funds from my last ETF report: the ^TYH^ and the ^QLD^, which made their gains just three days after highlighting them in 5 ETFs for the Next 5 Days.
Heading into trading on Friday and looking into the coming week, markets are overbought after rallying for three days in a row below the 200-day moving average. As such, edges have shifted toward the short side, and traders will likely be looking for opportunities to fade the current market advance in the near term.
Here are 5 ETFs for the Next 5 Days
The ^EWA^ rallied to close in overbought territory below the 200-day for a second day in a row. The fund, which finished at a new, 7-day closing high, gained more than 4% in Thursday’s session.
Up almost 5% ahead of trading on Friday was the ^EWZ^. EWZ, which has been trading below its 200-day moving average since early May, has closed higher for three days in a row, the most recent finish in overbought territory below the 200-day.
The ^EZA^ has also gained for each of the past three days and is now overbought below its 200-day moving average. EZA ended the day on Thursday up by more than 2%.
Recent gains in both technology and basic materials have exchange-traded funds representing those sectors climbing into overbought territory below the 200-day ahead of trading on Friday. Shares of the ^XLK^ are up for three in a row after gaining more than 1% on Thursday. The ^XLB^ added more than 2%, closing in overbought territory below the 200-day moving average for the past two days in a row.
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David Penn is Editor in Chief of TradingMarkets.com