High Probability ETF Trading: 7 ETFs You Need to Know for Friday (VWO, EWH, GLD, GDX, EWQ, DIA, EDC)

Sellers remain on the offensive in emerging markets ETFs, creating widespread oversold conditions in Asian ETF markets in particular. A growing number of international funds have slipped beneath their 200-day moving averages, including the ^FXI^.

Short-term oversold conditions have lured buyers into previously oversold ETF markets in energy. The ^XLE^ gained more than 1% on Thursday after a two-day pullback that took the ETF into oversold territory above the 200-day.

Here are 7 ETFs You Need to Know for Friday.

The most oversold exchange-traded fund in our database is the ^VWO^, a fund we highlighted in yesterday’s 7 ETFs You Need to Know. VWO has closed in oversold territory above the 200-day moving average for four trading days in a row.

Asian country funds are disproportionately represented among our most oversold ETFs going into the final trading day of the week. This includes ETFs like the ^EWH^ (below).

EWH chart

Shares of EWH have closed lower for four days in a row, the last three in oversold territory. The fund pulled back by more than 1% in trading on Thursday.

While the ^GLD^ remains in neutral territory above the 200-day after a two-day pullback, two selling days in the ^GDX^ have put the fund in oversold territory above the 200-day moving average.

Trading just outside of oversold territory above the 200-day moving average are a pair of European country funds: the ^EWU^ and the ^EWQ^ (below).

EWQ chart

Shares of EWQ were actually higher on an open-to-close basis, gapping down at the open and trading higher over the course of the trading day on Thursday.

Closing in overbought territory above the 200-day moving average for eight days in a row on Thursday was the ^DIA^.

The ^EDC^ (below) closed in oversold territory on Thursday for the third time this year.

EDC chart

Previous oversold closes in EDC, in mid and late January, resulted in sharp, two-day rallies in the leveraged ETF.

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