High Probability ETF Trading: 7 ETFs You Need to Know for Friday (IYR, VNQ, VWO, EEM, EPI, EWZ, EWW)

While the rest of the world pulls back, the U.S. markets continue to trade at overbought levels going into the final trading day of the week. With growing weakness in emerging markets and international ETFs, high probability traders may find themselves turning their attentions offshore in the short term.

Here are 7 ETFs You Need to Know for Friday.

The real estate sector remains the most oversold sector in the U.S. equity ETF market right now. In addition to the funds noted in yesterday’s 7 ETFs You Need to Know, exchange-traded funds like the ^IYR^ and the ^VNQ (below).

VNQ chart

VNQ closed lower for a second day in a row on Thursday, the ETF’s second consecutive close in oversold territory above the 200-day.

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Emerging markets ETFs have pulled back into oversold territory in recent days as well. Two options for short term, high probability traders include the  ^VWO^ and the ^EEM^ (below).

EEM chart

EEM has closed lower for four trading days heading into Friday’s open.

Closing down for a fifth day in a row on Thursday were shares of the ^EPI^. The ETF pulled back by well over 3%.

Latin America is the source of a number of exchange-traded funds that have become increasingly oversold above the 200-day. Two such ETFs include the ^EWZ, down four days in a row, and the ^EWW^ (below).

EWW chart

Shares of EWW have closed lower for two out of the past three trading days. Thursday’s close marked the ETF’s first oversold close in three weeks.

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David Penn is Editor in Chief of TradingMarkets.com