High Probability ETF Trading: 7 ETFs You Need to Know for Friday (GDX, EWA, EZU, RTH, SPY, QQQQ, FAZ)

Gold funds and country/regional-based exchange-traded funds are among the most oversold funds heading into the final trading day of the week. Many of these gold ETFs, in particular, have been featured here in 7 ETFs You Need to Know over the past few days as the pullback in gold has accelerated.

Here are 7 ETFs You Need to Know for Friday.

The most oversold exchange-traded fund in our database, for example, is a gold fund: the ^GDX^, which has closed lower for four days in a row.

Down three trading days in a row is the ^EWA^ (below).

EWA chart

The pullback in EWA comes just after the ETF had hit a new intermediate high, its highest level since early November.

Also closing lower for the past three trading days is the ^EZU^. EZU is based on the equity markets of the countries that are a part of the European Monetary Union (EMU).

In addition to the retail-related exchange-traded funds mentioned in yesterday’s 7 ETFs You Need to Know, the ^RTH^ (below).

RTH chart

Shares of RTH have pulled back for three days in a row, pulling back by another 1% ahead of trading on Friday.

The ^SPY^ has pulled back to just outside of overbought territory above the 200-day moving average. Any additional significant selling in the market for SPY could bring the fund down to levels from which it has historically reversed.

By contrast, the ^QQQQ^ (below) continues to trade in overbought territory above the 200-day, closing in overbought territory for three out of the past four trading days.

QQQQ chart

The QQQQ had pulled back to oversold territory as recently as the end of December, when a two-day pullback helped provide the oversold conditions that have led to the fund’s recent short term advance.

The pullback of more than 1% in the ^FAS^ has helped relieve overbought conditions in that exchange-traded fund heading into the final trading day of the week.

With 7 professional, quantified trading strategies for trading both bull and bear markets, High Probability ETF Trading by Larry Connors and Cesar Alvarez was voted one of the top 10 trading books of 2009 by SFO Magazine. Click here to find out why.

David Penn is Editor in Chief of TradingMarkets.com