High Probability ETF Trading: 7 ETFs You Need to Know for Friday (ITB, XHB, GLD, DGP, EEM, EWS, EWG)
Overbought conditions have returned to most U.S. equity index ETFs such as the ^QQQQ^ and the ^SPY^. Around the world, ETF markets are much less overbought, with a number of ETFs trading just outside of oversold territory ahead of Friday’s open.
From a sector perspective, real estate and homebuilder ETFs are among the few in oversold territory heading into the final trading day of the week. Energy ETFs like the ^XLE^ and the ^DIG^ endured early selling on Thursday before rallying to close near session highs.
Here are 7 ETFs You Need to Know for Friday.
There are only two exchange-traded funds (ETFs) in our database that are trading in oversold territory above the 200-day moving average. One of those exchange-traded funds is the ^ITB^ (below).
Shares of ITB have closed lower for two days in a row, and are down for four out of the past five.
The other oversold ETF in our datbase is the ^XHB^, which is also down for the past two consecutive trading days.
Rallying back into overbought territory above the 200-day moving average on Thursday was the ^GLD^. GLD closed higher by more than 1%. Up well over 2% and closing at its highest level in more than nine days was the ^DGP^.
Despite pulling back for two days in a row, the ^EEM^ (below) remains in neutral territory above the 200-day moving average.
EEM was in oversold territory as recently as a week ago. Then, a one-day retreat in oversold territory preceded a strong, two-day rally in the fund.
Among country funds, the ^EWS^ (below) is among a number of ETFs based on international markets that are trading just outside of oversold territory above the 200-day.
The Thursday pullback in EWS comes after a three-day rally into overbought territory.
Down two days in a row heading into trading on Friday was the ^EWG^. Any signifcant selling on the final trading day of the week will likely find the exchange-traded fund in oversold territory above the 200-day moving average.
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