ETF Strategies for Short Term Traders: Opportunities Abound in Asia
For short term traders looking for high probability ETF trading opportunities, country-based exchange-traded funds – especially those earning high ETF PowerRatings – are increasingly the place to look.
Why do high probability ETF traders love country-based funds? As I have written over the past few days when country ETFs have dominated our top ETF PowerRatings roster, country ETFs do a better job of moving back and forth between overbought and oversold extremes compared to sector and commodity based exchange-traded funds.
And because high probability trading is all about buying oversold markets and selling overbought ones (“buying the selling and selling the buying” as TradingMarkets CEO and founder Larry Connors calls it), funds that move between these two conditions more reliably and consistently are the funds that high probability traders in general – an ETF PowerRatings traders in specific – want to focus on.
Going into trading on Thursday, there are a number of country ETFs that have earned ETF PowerRating of at least 8. Recall that while our highest ETF PowerRatings funds have produced significant short term gains nearly 80% of the time in our testing going back to 2003, even those ETFs with PowerRatings of 8 have made similar gains in the short term more than 75% of the time.
Let’s take a look at three country ETFs that have pulled back in recent days and may represent a tradable opportunity should the markets continue to retreat.
First up is the iShares MSCI Austria Investable Markets Index Fund ETF
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EWO |
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Chart |
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PowerRating) (above). This ETF has earned an ETF PowerRating of 9 going into Thursday’s trading. EWO has bobbed in and out of oversold territory above the 200-day moving average for the past few days, alternating earning ETF PowerRatings of 9 and 10 over the past 7 days. EWO currently has a neutral 2-period RSI of just under 45.
Below is a chart of the PowerShares India Portfolio ETF
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PIN |
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PowerRating).
Closing for the past two days in oversold territory, the PIN has earned an ETF PowerRating of 8. Like many funds, PIN has been largely rangebound over the past several days, moving back and forth in a relatively tight, 50 cent range since late November.
The last ETF in today’s report is also a country fund from Asia: the iShares MSCI Taiwan Index Fund ETF
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EWT |
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Chart |
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PowerRating) (below).
Also rangebound for the past several days, the EWT nonetheless has become increasingly oversold over the past few trading sessions, dropping from a 2-period RSI of more than 70 to a 2-period RSI of less than 12 on Thursday’s close.
Isn’t it time you gave PowerRatings a try? Our top-rated ETFs have been correct nearly 80% of the time since 2003. Click here to launch your free, 7-day trial to our ETF PowerRatings today!
David Penn is Editor in Chief at TradingMarkets.com.