High Probability ETF Trading: 7 ETFs You Need to Know for Monday (EWZ, EWP, EWG, SSG, SPY, OIH, OIL)

Moderately overbought conditions are likely to greet traders when the markets open on Monday. Some profit-taking in commodities, especially crude oil, has created oversold conditions in oil-based ETFs and ETNs even as the oil stock funds have remained in neutral territory.

Buyers remain aggressive in technology, with the ^SMH^ adding more than 1% on Friday and closing in overbought territory for the third session out of the past four.

Here are 7 ETFs You Need to Know for Monday.

Among the few country funds trading in oversold territory above the 200-day moving average are the ^EWZ^ and the ^EWP^ (below).

EWP chart

Shares of EWP have been trading above their 200-day moving average since mid-January. Down three in a row heading into trading on Monday, EWP is back in oversold territory for the second time since closing above its 200-day.

Trading just outside of oversold territory above the 200-day are other European-based country funds, such as the ^EWG^. EWG has also closed lower for three consecutive trading days.

Reflecting the continued strength in technology shares, the ^SSG^ retreated to a new, oversold low ahead of trading on Monday.

Closing in overbought territory above the 200-day moving average for three out of the past four trading days is the ^SPY^ (below).

SPY chart

The SPY was last in oversold territory in late January, the result of a sharp, one-day pullback.

While many oil service and energy equity ETFs like the ^OIH^ remain in neutral territorym, commodity-based oil ETFs like the ^OIL^ (below) have sold off much more sharply.

OIL chart

OIL pulled back by more than 2% on Friday, closing lower for the third session out of the past four.

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