ETF PowerRatings Strategies for Traders: 3 Oversold Country ETFs You Need to Know
When it comes to high probability ETF trading, our research has shown that exchange-traded funds (ETFs) that are based on the equities of a country or region have outperformed ETFs that are based on the stocks a single sector like financials, technology or energy.
So whenever we are analyzing the ETF market for potential ETF trades, one of the things we look to see is whether or not there are any country ETFs that have pulled back above their 200-day moving averages and become exceptionally oversold in the process.
Of course now, thanks to our ETF PowerRatings, these oversold ETFs are easier to spot than ever. By sticking with those ETF PowerRatings with ratings of 8, 9 or 10, traders know that they will always have the historical edges on their side — edges that have produced 80% correct trades for our highest rated ETFs.
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Looking at the ETF market in the first few minutes of trading on Thursday, there are three country ETFs that seem worth watching over the next few days.
The iShares MSCI Sweden Index Fund ETF
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PowerRating) has appeared in our TradingMarkets Most Overbought and Most Oversold column over the past few days — being noted as our “Oversold ETF of the Day” on Tuesday.
As of the opening on October 1, EWD had earned an ETF PowerRating of 8. Having closed lower for the past two days in a row, EWD has a 2-period RSI of just under 18 (and two consecutive days in oversold territory).
The other two country ETFs I want to highlight have not yet earned the sort of high ETF PowerRatings that mark them as “consider buying†ETFs right now. But these next two ETFs have dipped into oversold territory over the past few days and should probably be watched by traders wanting potentially to get a lead on any breakdown that might be around the corner.
First is 7-rated iShares MSCI Malaysia Index Fund ETF
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PowerRating).
EWM has remained in a trading range for the past several days — really almost since the beginning of September. Over the past three days, EWM has begun to slip lower, becoming increasingly oversold above the 200-day moving average. As of the Wednesday close, EWM had closed in oversold territory for two days in a row.
The other ETF that traders may want to keep an eye on in the event that sellers become dominant in the near-term is the iShares MSCI South Africa Index Fund ETF
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PowerRating). EZA has an ETF PowerRating of 6.
An ETF PowerRating of 6 is closer to a neutral level than we’d like in terms of potential trades. But I consider EZA to be worth watching in part because of its low, 2-period RSI of approximately 23 (I note as I write that EZA is moving lower still in the first few minutes of trading here on Thursday). Also, EZA has closed lower for the past two days in a row.
Our highest rated ETFs have produced positive returns in the short term more than 80% of the time since 2003. Click here to launch your free trial to our ETF PowerRatings!
David Penn is Editor in Chief at TradingMarkets.com.