High Probability ETF Trading: 7 ETFs You Need to Know for Friday (GLD, IAU, DGP, GDX, IWM, SMH, EWT)
U.S. markets followed through to the upside going into trading on Friday, with technology and financials among the biggest beneficiaries of the renewed buying.
Oversold conditions are relatively scarce. But traders will note the widespread weakness in precious metals ETFs – both gold and silver – many of which remain in oversold territory above the 200-day (see more below).
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Here are 7 ETFs You Need to Know for Friday.
Trading just inside of oversold territory above the 200-day moving average heading into the final trading day of the week are a number of gold-related exchange-traded funds.
In fact, the only exchange-traded funds in our database that are trading in oversold territory here at week’s end are gold funds. This includes the ^GLD^, the ^IAU^ and a leveraged bullion fund, the ^DGP^ (below).
Shares of DGP have closed lower for two days in a row, pulling back by more than 2% on Thursday.
One popular and widely-traded gold fund, the ^GDX^, has also closed lower for two days in a row. But remains just outside oversold territory above the 200-day moving average.
Any weakness in the market for GDX today on Friday will almost certainly pull the ETF down into oversold territory heading into the weekend.
Among the major U.S. equity index ETFs rallying into strength yesterday, some of the most impressive gains came from the oversold bounce in the ^IWM^. Shares of IWM rallied by more than 2% on Thursday to close at its highest level in more than a week.
Also up by more than 2% on Thursday, and reflective of the strength in the sector, was the ^SMH^ (below).
Shares of SMH rallied to close in overbought territory above the 200-day moving average ahead of Friday’s trading.
The most overbought fund in our database heading into the final trading day of the week? The ^EWT^ has closed higher for five consecutive trading days, up more than 2% on Thursday alone.
The past two closes in EWT have both been in overbought territory above the 200-day.
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David Penn is Editor in Chief of TradingMarkets.com