High Probability ETF Trading: 7 ETFs You Need to Know for Friday (IYE, XLE, DIG, ERX, RSX, EWC, QID)
Oversold conditions have become widespread throughout markets here and abroad. But the selling has clearly been fiercest in the energy patch, with the majority of energy and oil-related ETFs in oversold territory above the 200-day moving average. The major equity index ETFs like the ^SPY^ and the ^QQQQ^ have all pulled back into oversold territory heading into the final trading day of the week.
Here are 7 ETFs You Need to Know for Friday.
Energy funds are far and away the most oversold heading into trading on Friday – many of which have been in pullback mode for most of the week. Among the energy and oil-related ETFs that have moved the deepest into oversold territory above the 200-day are are the ^IYE^, which has closed lower for five consecutive trading days and was down another 3.5% on Thursday, and the ^XLE^ (below).
Like IYE, shares of XLE have closed lower for the past five days in a row and were down more than 3.5% heading into trading on Friday.
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Traders looking for leveraged plays on the energy market may want to keep an eye not only on the ^DIG^, which pulled back by 7% in Thursday’s trading, but also on the 3x leveraged ^ERX^ (below).
Shares of ERX pulled back by nearly 11% in Thursday’s trading to close in oversold territory for the first time in several months.
Among country funds, two of the most oversold heading into trading on Friday are the ^RSX^ and the ^EWC^ (below).
Pulling back for a fourth day in a row, shares of EWC dropped by more than 2% on Thursday.
What markets are overbought at a time when markets like the S&P 500 and the Nasdaq have closed lower for four out of the past five trading days? Bond funds for one. But another are inverse funds, both leveraged and non-leveraged, like the ^QID^. Shares of QID crossed into overbought territory on Thursday.
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David Penn is Editor in Chief of TradingMarkets.com